The Central Government has announced a significant boost for India’s electronics manufacturing industry, by continuing customs duty exemptions on several key electronic components and lithium-ion battery manufacturing equipment till the end of March 31, 2029.
This is to cut production costs, promote new investments and boost in-country electronics and semiconductors manufacturing capabilities in the country’s growing electronics and semiconductor industry. The new exemptions have gone into effect right away.
The big winners are manufacturers of display modules for cars, industry and medical applications. The duty exemption is for the imported display cells, backlight units, flexible printed circuit assemblies (FPCs), and frames and anisotropic conductive film (ACF). Relief has not been extended, though, to display assemblies used in such mobile phones, televisions, smartwatches, smartmeters and interactive flat-panel displays.
The government has also granted customs duty concessions for components for wireless charging systems for cellphone phones such as nano-crystalline assemblies, inductor coils, E-shields, PET liner, PC shims and neodymium iron boron (NdFeB) magnets related to NFC (which supports communication technology for cellphone phones). The Central Board of Indirect Taxes and Customs (CBIC) has come up with technical definitions to promote uniformity in the implementation of the exemptions.
In another major measure, the Centre has broadened its list of precious metal and heavy rare earth items which can be assembled for concessional customs duty to make lithium-ion batteries, to include 85 equipment items that span almost the entire lithium-ion battery manufacturing value chain from material processing equipment to welding machinery, testing equipment, packaging machinery, and environmental management systems.
The government is confident that these measures will bolster domestic supply chains, diminish reliance on imported final products and speed up investments in industries like electric vehicles, consumer electronics and advanced manufacturing. The move also aligns with India’s grand strategy of boosting the value addition locally and make the country a global electronics manufacturing powerhouse.