Government Cuts Customs Duty on Components for Electronics Manufacturing
The Centre has waived customs duty on select electronics manufacturing inputs, including display assembly components, lithium-ion cell machinery and wireless charging modules, to boost domestic production.
SociapaHQ
The Central government has exempted basic customs duty on certain goods used in the production of display assemblies, lithium-ion cells and inductor coil modules in a bid to boost domestic electronics manufacturing and cut dependence on imported components.
The Ministry of Finance issued three separate notifications on July 8, providing for the exemptions with immediate effect.
The duty relief applies to inputs used in the manufacture of display assemblies for automotive, medical and industrial applications, machinery required to manufacture lithium-ion cells and goods used in the manufacture of inductor coil modules for wireless charging systems.
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Duty Exemptions:
The notifications said that the customs duty exemptions on inputs used in display assemblies and inductor coil modules will be effective till March 31, 2029.
The revised customs framework also facilitates the existing exemptions for machinery used to produce lithium ion cells, by replacing several sector-specific provisions with a single technology-neutral exemption.
Under the revised framework, the benefit is extended to machinery used to manufacture lithium ion cells in all sectors, not just applications such as mobile phones or electric vehicles.
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The government hopes the move will ease the customs regime and encourage investments in the local battery cell manufacturing and wider electronics supply chain.
The display assembly notification provides duty exemptions for several key components, including display cells, flexible printed circuit assemblies (FPCAs), backlight units, frames and anisotropic conductive film used in the manufacture of automotive, medical and industrial displays.
But the exemption does not cover display assemblies for mobile phones, smartwatches, television panels, smart meters and interactive flat panel displays.
The customs duty waiver on inputs for inductor coil modules is also expected to support local production of wireless charging components, which are increasingly being used in smartphones, wearable devices and other consumer electronics.
