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Reduction in customs duty aligns with Prime Minister Narendra Modi’s vision of boosting the Indian economy and creating jobs by attracting major companies like Apple, Foxconn, and Samsung. India, the world’s second-largest mobile market, saw a 16% YoY increase in production read more
 "Phones, EV batteries to cost less, plastic toys, transmitters to burn holes in your pocket")
Smartphones and its spare parts set to become cheaper. Critical minerals used to make semicon and batteries for EVs are also getting cheaper. Image Credit: File, Reuters
The 2024 Union Budget, presented by Union Finance Minister Nirmala Sitharaman on July 23, brings significant changes to customs duties, impacting various goods from smartphones to EV batteries. These changes aim to provide relief to consumers and support domestic industries.
Announcing a reduction in basic customs duty on mobile phones and chargers, FM Sitharaman stated, “With a three-fold increase in domestic production over the last six years, the Indian industry has matured. I now propose to reduce the basic customs duty to 15 per cent on mobile phones and chargers.” This move is expected to lower costs for consumers and further stimulate domestic manufacturing.
This reduction in customs duty aligns with Prime Minister Narendra Modi’s vision of boosting the Indian economy and creating jobs by attracting major companies like Apple, Foxconn, and Samsung. India, now the world’s second-largest mobile market, saw a 16 per cent year-on-year increase in production, reaching $44 billion last year. Lower duties aim to accelerate this growth, positioning India as a hub for smartphone manufacturing.
Arijeet Talapatra, CEO, Transsion India, says “Transsion India welcomes the Ministry of Finance’s decision to reduce the basic customs duty from 20 per cent to 15 per cent on mobile phones, mobile PCBA, and chargers. This policy change will significantly benefit both manufacturers and consumers, fostering a more competitive smartphone market and strengthening our position in the global market. This move will undoubtedly bolster the industry’s growth making smartphones more affordable and we remain committed to the ‘Make-in-India’ initiative to bring the best-in-class smartphones to the ever-evolving Indian market.”
Customs Duty Exemptions for Critical Minerals
Sitharaman also announced changes in customs duties for critical minerals, stating, “For critical minerals, I propose to fully exempt customs duty on 25 minerals and reduce duty on two of them. This will provide a major fillip to the processing and refining of these minerals and boost their availability for strategic sectors like renewable energy, nuclear power, defence, and high-value electronics.” These adjustments aim to enhance the availability of essential minerals, supporting key industries and strategic sectors.
Increased Import Duty on Chemicals and Petrochemicals
To support existing and new capacities in the chemicals and petrochemicals sectors, the import duty on certain items will be increased from 10 per cent to 25 per cent. This measure is intended to encourage domestic production and reduce reliance on imports, fostering growth and investment in local industries.
Comprehensive Customs Duty Review
FM Sitharaman highlighted the government’s efforts to streamline customs duties, stating, “For customs, we reduced the number of customs duty rates in 2022-23. I propose to rationalize them after a review over the next six months.” This rationalization aims to simplify the customs duty structure, making it more efficient and transparent.
With these changes, the 2024 Union Budget seeks to balance consumer relief with support for domestic industries. By reducing customs duties on mobile phones and chargers and exempting critical minerals, the government aims to make essential goods more affordable and support strategic sectors.
Meanwhile, increasing import duties on chemicals and petrochemicals is expected to boost local production and investment. These measures reflect the government’s commitment to fostering economic growth and self-reliance.
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English (US) ·