Import taxes on vital components for smartphones and electronics, such as open cells and lithium-ion battery scrap, have been slashed in Budget 2025.
The BCD on flat-panel displays rises from 10% to 20%, while BCD on open cells drops to 5%.
Industry experts expect the reduction in manufacturing costs to lead to lower prices for smartphones, Smart LED TVs, and electric vehicles.
Budget 2025: Finance Minister Nirmala Sitharaman presented Budget 2025 on Saturday. In order to boost the Make in India initiative, FM Sitharaman has announced a reduction in import taxes on critical components used in smartphone batteries, Smart LED TVs and other electronics. With these announcements, the move is expected to bring down the costs of manufacturing and, ultimately, the retail prices of these products.
The Basic Customs Duty (BCD) on open cells, cobalt, lithium-ion battery waste, lead, zinc, and 12 other vital minerals that are necessary for the manufacturing of semiconductors, batteries, and renewable energy equipment has been lowered, according to Sitharaman.
Budget 2025: What are the key changes
The BCD on flat-panel displays has increased from 10% to 20% under the current budget proposal, while the BCD on open cells and related components has been lowered to 5%. By doing this, the government hopes to promote domestic manufacturing of lithium batteries, which are essential for electric cars and smartphones.
Furthermore, 28 more capital products essential for mobile phone battery production have been exempted from import charges in an effort to stimulate local manufacturing. The Finance Ministry’s decision to decrease customs charges is expected to have a substantial influence on final consumer costs, notably in the electronics and smartphone sectors.
As a result, consumers may soon see lower prices for smartphones and Smart LED TVs, boosting the local manufacturing ecosystem even more.
What industry thinks
“The Union Budget 2025 signals a strategic move to position India as a global hub for mobile manufacturing. The proposed tariff reductions on essential assembly components—such as PCBAs, camera modules, USB cables, and display modules—are a welcome measure that will improve cost efficiencies, accelerate localization, and strengthen the Make in India initiative,” said Arijeet Talapatra, CEO at itel and Tecno.
“The decision to raise the income tax exemption limit up to ₹12 lakh will substantially increase disposable income, providing a significant financial boost to taxpayers, leading to increased consumer spending on electronics. As purchasing power of consumers rises, the demand for smartphones and other digital devices is expected to rise, further fueling the growth of India’s electronics industry,” Talapatra added.
A. Gururaj, Managing Director, Optiemus Electronics, said, “The Union budget has rightfully given impetus on boosting the purchasing power of a large population with Tax relaxation and support to Agriculture and farming community. We firmly believe that with more money in hands farmers’ capability to adopt new technologies like Drones significantly improves and helps grow the market faster. For electronics manufacturing, the relaxation in Basic Custom duties for certain components is a positive step and a continuation of earlier policy initiatives and will boost indigenous manufacturing. We welcome the union budget in letter and spirit as both developments positively impact the Optiemus Group. We look forward to continuing to support the growth of our economy with our efforts.”
“The National Manufacturing Mission is a significant step toward strengthening India’s clean-tech ecosystem, ensuring self-reliance in EV battery and solar panel production. Additionally, the government’s decision to fully exempt Basic Customs Duty on critical minerals like cobalt and lithium-ion battery waste will secure essential resources for domestic manufacturing while fostering job creation,” said Hyder Ali Khan, CEO & Director of Godawari Electric Motors.
Khan added, “The customs duty exemption on 35 capital goods for EV battery manufacturing is another welcome move, as batteries account for nearly 40% of an EV’s cost. Any cost reduction in this segment will directly make EV adoption more affordable for consumers. Moreover, the enhanced tax relief of up to ₹12 lakh will give consumers greater purchasing power, accelerating the transition to green mobility. These progressive measures pave the way for a cleaner, more sustainable future for all of us.”
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Ashish Singh
Ashish Singh is the Chief Copy Editor at Digit. Previously, he worked as a Senior Sub-Editor with Jagran English from 2022, and has been a journalist since 2020, with experience at Times Internet. Ashish specializes in Technology. In his free time, you can find him exploring new gadgets, gaming, and discovering new places. View Full Profile
