Concessions in customs duty to electronics manufacturing

Concessions in customs duty will be given to certain consumer electronic devices to promote manufacturing across wearables, hearables and specific mobile phone components.

"Duty concessions being given to promote electronics manufacturing, wearables and hearables devices included. Duty concessions to parts of mobile phones including camera module etc," said finance minister Nirmala Sitharaman on Tuesday.

The reduction in some of the component duties come at a time when the telecom sector has been facing a supply chain and component shortage and a drop in customs duty will give a boost to manufacturing.


" We believe the budget incentives around wearables and hearables will provide a further impetus to Make in India in electronics and contribute to the rise of Indian domestic champions in this sector," said Head – Industry Intelligence Group at CMR. "The pandemic has given a significant boost to hearables and wearables. Increased localization will enable these brands to build greater supply chain efficiencies and shorter time to market," he added.

Industry body Cellular Operators Association of India (COAI) had estimated that the high customs duty was disrupting the cost effectiveness of the telecom companies.

About 85% of telecom equipment in the country is imported and basic customs duty (BCD) of 20% is levied on them.