Union Budget 2025 proposes the removal of import duties on several key mobile phone components. Finance Minister Nirmala Sitharaman announced in the Union Budget 2025 several measures aimed to bolster domestic production and government’s Make in India initiative. The announcement are likely to help the ‘make in India’ plans of three of the biggest smartphone brands in India — Samsung, Apple and Xiaomi.
India’s electronics manufacturing sector has witnessed significant growth, more than doubling in the past six years to reach $115 billion in 2024. This makes India the world’s second-largest mobile phone producer. Counterpoint research indicates that Apple led the Indian smartphone market in 2024 with a 23% revenue share, closely followed by Samsung at 22%.
The eliminated tariffs, previously at 2.5%, apply to components essential for mobile phone assembly, including printed circuit board assemblies, parts of camera modules, and USB cables. This reduction aims to make Indian manufacturing more competitive amidst global economic uncertainty.
Heeds to IT ministry’s ‘warning’ on China and Vietnam
These tariff cuts serve as a strategic response to potential global trade disruptions. While some nations are pursuing policies aimed at reshoring manufacturing, India is actively seeking to capitalize on international trade dynamics and attract a greater share of the global supply chain. This proactive approach follows previous internal warnings from India’s IT ministry about the risk of losing ground to competitors like China and Vietnam in smartphone exports if tariffs were not reduced to attract global companies.
This initiative builds upon previous efforts by the Indian government to streamline and rationalize the nation’s customs duty structure. Last year’s budget also announced a review of these duties with the goals of simplification and trade facilitation. A key objective of this review is to eliminate inverted duty structures, where tariffs on raw materials or intermediate goods are higher than those on finished products. Such complex duty structures have long been identified as obstacles to efficient domestic production and a source of trade disputes within India. The simplification of the tariff structure promises to create a more favorable environment for manufacturers operating within the country.