Budget 2024-25: Centre Reduces Customs On Several Mobile Parts By 15%

To ramp up India’s share in the global mobile market, finance minister Nirmala Sitharaman on July 23 (Tuesday) announced a cut in basic customs duty (BCD) rates for several mobile phone parts.

The central government slashed the BCD for mobile phones, mobile printed circuit board assembly (PCBA) and mobile chargers by 15%.

“With a three fold increase in domestic production and an almost 100% jump in exports in the last six years, the Indian mobile industry has matured. In the interest of consumers, I propose to reduce the BCD on mobile phones, mobile PCBA and mobile charger by 15%,” Sitharaman said.

A day before the budget announcement, the Economic Survey highlighted the uptick in mobile phone exports. It said that India is a leading benefactor of global entities moving away from production in China as part of the China Plus One business strategy, leading to the growth in India’s manufacturing exports.

Overall, the survey said that India has seen a boost in its electronic exports, particularly in mobile phones. According to a DoT statement earlier this month, India’s mobile phone exports zoomed to INR 1.28 Lakh Cr in 2023-24 from INR 1,367 Cr in 2017-2018. 

With the government’s push on fostering the homegrown mobile phone market, India  is emerging as a smartphone manufacturing hub, with companies like Apple, Samsung, Oppo and Xiaomi expanding their manufacturing operations in the country. 

iPhone maker Apple is aggressively expanding its manufacturing capacity in the country. As a result, Apple produced iPhones worth $14 Bn in India during FY24, constituting 14% of its global iPhone production.

Meanwhile, tech giant Google is also working on plans to produce its flagship Pixel 8 smartphones in India. It aims to produce over 10 Mn units locally by the end of this year. In line with this, Xiaomi India recently revealed its plan to further expand its manufacturing partnerships in India.   

In tandem with the increase in manufacturing, India’s consumption of smartphones has also grown substantially in recent years. According to the International Data Corporation’s (IDC) Worldwide Quarterly Mobile Phone Tracker, India’s smartphone market shipped 34 Mn smartphones in the first quarter of FY24. This was a growth of 11.5% year-on-year. Recently, Union Minister Ashwini Vaishnaw said that India produces 99% of its total mobile phone demand locally.