Announcing changes to duties right before the Union Budget, the Finance Ministry raised duties on displays and reduced them on components, eyeing to bolster India’s local electronics manufacturing.
Ahead of India’s new budget announcements on February 1, the Ministry of Finance has highlighted the customs duty rates for electronic goods. Eyeing to promote domestic manufacturing, the ministry increased the basic customs duty (BCD) on Interactive Flat Panel Displays (IFPD) to 20 per cent. According to a report by ANI, this move is designed to address the inverted duty structure that had previously hampered the local manufacturing sector.
Simultaneously, the BCD on open cells and key components used in electronics was reduced to 5 per cent, further aligning with the government’s ‘Make in India’ policy. Finance Minister Nirmala Sitharaman confirmed this in a post on the social media platform X, saying, “In line with our ‘Make in India’ policy, I propose to increase the BCD on Interactive Flat Panel Display (IFPD) from 10 per cent to 20 per cent and reduce the BCD to 5 per cent on Open Cell and other components.”
Meanwhile, to promote the local manufacturing of Open Cells for LCD/LED TVs, the government has fully exempted the BCD on certain Open Cell parts. This follows a previous reduction in 2023–24, where the BCD on Open Cell parts was cut from 5 per cent to 2.5 per cent. Now, these parts will be completely duty-free, facilitating the growth of the domestic manufacturing ecosystem.
This policy change mirrors the success of similar measures in the smartphone sector, where phased manufacturing programs helped India become the world’s second-largest mobile phone producer.
While the initial impact could raise prices for imported high-end panels, the long-term vision is to stimulate domestic investment and make India a competitive player in global electronics exports.
Local manufacturing firms and global original equipment manufacturers (OEMs) will now be incentivised to localise their supply chains to avoid the 20 per cent duty on finished goods.
