India's Mobile Manufacturing Gets a Boost with New Tax Reforms

The Indian government's proposal to cut import duties aims to lower costs for domestic mobile manufacturers. While not offering consumers immediate price relief, these measures increase industry competitiveness, attract investment, and enhance exports. Additionally, tax exemptions are expected to boost local production and consumer purchasing power.

The Indian government has proposed cutting import duties on crucial components, alongside exempting capital goods, in a bid to lower domestic mobile manufacturing costs. This move, however, might not translate into substantial consumer savings, according to the India Cellular and Electronics Association.

Association Chairman Pankaj Mohindroo highlighted the elimination of the 2.5% duty on mobile parts as a former 'nuisance' tariff without value in manufacturing. The revised budget promises improved competitiveness in India's mobile manufacturing landscape by drawing investments and ramping up exports.

Noteworthy announcements in the 2025-26 union budget include the removal of basic customs duty on mobile phone inputs, with expectations of bolstering local value addition, particularly in LCD and LED panel manufacturing. Tax exemptions are poised to increase consumer spending power, likely benefiting the local mobile phone market.

(With inputs from agencies.)