Indian finance minister Nirmala Sitharaman announced key changes in customs duties and export policies during the Union Budget 2025-26, focusing on electronics manufacturing and export facilitation.
“As part of our Make in India policy and to rectify the inverted duty structure, I propose to increase the Basic Customs Duty (BCD) on interactive flat panel displays from 10% to 20%,” Sitharaman said in her Budget speech. This will disincentivise the import of finished screens into India.
To promote local television manufacturing, she said, “I had reduced the BCD on parts of open cells used in LCD and LED TVs from 5% to 2.5%. To further boost the manufacture of such open cells, the BCD on these parts will now stand exempted.”
Focusing on India’s push for electric vehicles (EVs) and mobile technology, the finance minister announced duty exemptions for machinery used in lithium-ion battery production. “I propose to add 35 additional capital goods for EV battery manufacturing and 28 additional capital goods for mobile phone battery manufacturing,” she said, adding that this would help boost domestic production of lithium-ion batteries.
In a significant move for the networking industry, she announced a reduction in BCD on Carrier-Grade Ethernet switches from 20% to 10%, bringing it in line with non-Carrier Grade Ethernet switches.
The customs duty changes come as India aims to achieve $300 billion electronics production by 2025-26, with exports projected to reach ₹3.25 lakh crore ($39 billion) in FY25.
Previous Budgets reduced tariffs on 25 critical minerals and mobile components to address cost disabilities. Critical minerals, essential for high-tech industries, saw major duty reductions. “In the July 2024 Budget, I had fully exempted BCD on 25 critical minerals that are not domestically available and reduced BCD on two other minerals to boost their processing, especially by MSMEs,” Sitharaman said.
“Now, I propose to fully exempt BCD on cobalt powder, lithium-ion battery waste and scrap, lead, zinc, and 12 more critical minerals,” she added. This move aims to ensure raw material availability for Indian manufacturers and generate more jobs for the youth.
