New Delhi: Reducing duties on mobile parts and components in the Union Budget 2025-26 could strengthen India’s position as a global electronics manufacturing hub and help achieve the $500 billion electronics industry target, according to the India Cellular and Electronics Association (ICEA).  

In a letter to Sanjay Malhotra, Revenue Secretary at the Ministry of Finance, the ICEA proposed cutting the 2.5 per cent duty on parts and inputs like PCBAs (Printed Circuit Board Assemblies), FPCs (Flexible Printed Circuits), camera modules, and connectors to zero per cent. The industry body noted that high tariffs on these sub-assemblies and their components increase manufacturing costs and reduce competitiveness.  

Recommendations for duty reductions  

PCBAs and FPCs: FPCBAs, currently classified as PCBAs despite their similarity to connectors, should be placed under a new HSN Code with a 10 per cent duty rate.  
Open cell sub-assemblies: The ICEA called for a reduction of the 2.5 per cent duty on inputs for open cells to zero per cent to support local television manufacturing.  

Challenges in display manufacturing  

The ICEA highlighted that the current 15 per cent duty on car displays, Blu (Backlight Units), cover glass, and open cells creates an inverted duty structure. This increases costs and discourages local production.  

“Display manufacturing processes are similar across segments. To encourage and build scale for display assembly manufacturing in India, all inputs for Display Assembly, regardless of end use, should attract zero duty. This aligns with the duty structure for mobile phone displays,” the ICEA suggested.  

Support for domestic hearable device industry  

To foster the growth of India’s nascent hearable device industry, the ICEA recommended maintaining the current duty structure while ensuring that components and inputs remain duty-free.  

The letter also pointed out that inverted and convoluted duty structures for parts like Inductor Coil modules add to costs, complicate customs processes, and cause clearance delays.  

“The 2.5 per cent tariff on key inputs hinders competitiveness and discourages local production due to the lack of sufficient differential duty,” the ICEA stated.  

The recommendations aim to simplify the duty structure, reduce costs, and encourage domestic manufacturing, bolstering India’s electronics industry and paving the way for significant growth in the sector. 

IANS