Union Budget 2025: Electronics Industry to Benefit from Key Reforms

The Indian electronics industry is set to witness significant growth following the tariff rationalization measures proposed in the recent budget. The measures aim to establish competitive costs while driving investment and increasing local production levels to improve domestic manufacturing. Various industry experts and executive professionals agree that these measures will help India achieve its goal of becoming a worldwide manufacturing center with a projected $500 billion electronics production target by 2030.

The budget plan works toward decreasing prices for essential electronic goods, including mobile phones and televisions, until they become accessible to consumers, which generates increased purchasing behavior. The economic transformation will boost consumer electronics purchases since middle-class citizens receive tax deduction that raise their disposable income.

Pankaj Mohindroo, chairperson of the India Cellular and Electronics Association (ICEA), stated, "They (budget incentives) provide an impetus for domestic value addition, export growth, and job creation, reinforcing India's trajectory as an emerging leader in the global electronics landscape."

Proposed reforms suggest eliminating the 2.5% basic customs duty tax on essential mobile components such as printed circuit board assembly (PCBA), camera modules, connectors and USB cables to enhance India's position in mobile handset manufacturing.

Prashant Singhal, markets leader at EY India, highlighted that with 330 million mobile handsets produced in FY24, the reduced duties will likely make handsets more affordable. Additionally, the increase in BCD on interactive flat panel displays (IFPDs) will encourage domestic production, with companies like Dixon Technologies already making strategic investments.