Budget 2025: Simplified tariff structure, lower tax on electronics sector's wish list
Budget 2025: India’s electronics industry is eyeing significant reforms in the upcoming Union Budget to address challenges like high tariffs, regulatory hurdles, and tax compliance. They propose a simplified tariff structure, tax reductions, and f...
By ET Bureau |
Budget 2025: The electronics industry, one of India’s largest export sectors, is hoping for major reforms in the upcoming Union Budget. With nearly all mobile phones sold in India now made locally, electronics manufacturing output reached $115 billion in FY24, with $29 billion coming from exports. The industry has set an ambitious target of achieving $500 billion in output by 2030.
Key Challenges
High Tariffs on Components: Tariffs on sub-assemblies and components raise overall manufacturing costs.
Regulatory Hurdles: Challenges in interpreting rules for assembly and testing.
Global Uncertainties: Geopolitical issues have delayed the establishment of new plants.
Tax Compliance: Heavy tax burdens hinder growth.
Testing and Certification Costs: These add to manufacturers’ expenses.
Promotion Issues: Lack of visibility for "Made in India" products globally.
Industry Expectations
To address these challenges, the sector has put forth the following recommendations:
Simplified Tariff Structure:
0% customs duty on parts and sub-parts of sub-assemblies.
5% duty on specific components.
10% duty on sub-assemblies and components.
15% duty on finished goods.
Tax Reforms:
Reduce the 2.5% duty on items like PCBA, FPCs, and camera modules to zero.
Extend the 15% corporate tax rate for the electronics industry until March 2029.
Financial Support:
Allocate Rs 40,000 crore to build large-scale factories and boost the assembly ecosystem.
Other Measures:
Establish an investment fund for SMEs making electronic components.
Provide exemptions from quality control orders for importing essential materials.
Offer a 4-5% export incentive under the RoDTEP scheme.
