Union Budget 2025: FM Sitharaman Announces Tariff Removal from PCBAs, Other Mobile Phone Components

In her eighth annual Budget, Finance Minister Nirmala Sitharaman outlined significant moves aimed at bolstering India's electronics manufacturing sector, including major tariff adjustments on mobile phone components and display technologies.

While the minister did not mention the changes during her speech in Parliament, a detailed 60-page document revealed that tariffs on several critical components used in mobile phone manufacturing, such as printed circuit board assemblies (PCBAs), camera modules, connectors, and components for wired headsets and microphones, have been reduced from 2.5% to zero.

Experts view the removal of the basic customs duty (BCD) on these components as a boost to local electronics manufacturing. Pankaj Mahindroo, Chairman of the India Cellular and Electronics Association (ICEA), said the reduction would enhance competitiveness. "The rationalisation of tariffs on key inputs and components creates a more competitive cost structure and encourages deeper integration with global value chains," Mahindroo explained.

He further emphasized that the previous 2.5% duty had done little to expand domestic manufacturing, instead raising costs for businesses. "The removal will enable manufacturing, remove ambiguity, and increase the competitiveness of manufacturing," he added.

In addition to mobile components, Sitharaman's speech also touched upon the display technology sector. The BCD on Interactive Flat Panel Displays (IFPD), a market currently valued at over ₹7,000 crore, will see an increase from 10% to 20% in an effort to encourage local manufacturing of televisions and address the inverted duty structure that has long hindered the sector.

However, the proposed tariff reduction on Open Cell—a thin-film transistor (TFT) crystal display that makes up about 60% of a television’s cost—has drawn mixed reactions. Some industry stakeholders have praised the move as a step towards boosting local production of display modules for LED TVs, while others have raised concerns about the potential for an uneven playing field among manufacturers.

These tariff revisions are part of a broader strategy to support the government's goal of fostering a more self-reliant electronics industry and reducing reliance on imports.