India’s electronics makers have flagged urgent fixes they want in the Union Budget 2026–27, saying uneven customs duties and policy gaps are pushing up costs and hurting India’s push to become a global
electronics manufacturing hub.
As reported by Moneycontrol, in its budget note, the Indian Cellular and Electronics Association (ICEA) has asked the government to clean up inverted duty structures, lower basic customs duties on key parts, and remove operational hurdles that slow down production and exports.
Push to rationalise mobile component duties
As reported by Moneycontrol, ICEA wants import duty on small but critical mobile phone sub-assemblies—like microphones, receivers and speakers—cut from 15% to 10%. While these parts form barely 1% of a phone’s total cost, higher duties inflate the final price. Aligning rates with other sub-assemblies, the association says, would make Indian-made phones more competitive and support deeper localisation.
The industry body has also sought a similar duty cut on PCBAs and FPCAs, from 15% to 10%. PCBA manufacturing is already largely local in India, and ICEA estimates revenue loss would be minimal since about 70% of FPCA imports—worth around $800 million a year—are used for export production, as reported by Moneycontrol.
Wearables, displays and inverted tariffs
As reported by Moneycontrol, for wearables and hearables, ICEA has proposed lowering customs duty on finished products to 15% from 20%, in line with India’s tariff rationalisation plan. It has also pointed out duty mismatches in mechanical parts used in wearables, asking for parity with mobile phone components by reducing the rate to 10%.
A key issue raised is the inverted duty structure on display assemblies used in automobiles, medical equipment and industrial electronics. Currently, both finished displays and their inputs attract 15% duty, offering little reason to assemble locally. ICEA has suggested keeping duty at 15% on finished displays while bringing input duties down to zero, mirroring the system already used for mobiles and TVs, as reported by Moneycontrol.
Advanced components and capital goods
As reported by Moneycontrol, ICEA has also flagged inverted duties on inductor coil modules used for wireless charging, where inputs face higher duties than the finished product. It has recommended zero duty on parts and inputs, while retaining the 10% duty on the finished module to back domestic manufacturing.
The same issue exists for capital goods used in phone manufacturing. Finished machinery often comes in duty-free, but parts needed to make such equipment locally can attract duties of up to 20%. ICEA has urged the government to extend zero-duty treatment to all components used in making capital equipment in India, as reported by Moneycontrol.
Classification clarity and MOOWR reforms
Beyond duties, as reported by Moneycontrol, the association has asked for uniform customs classification of display assemblies under HSN 8524, regardless of end use, to cut disputes. It has also pushed for a separate tariff heading for Interactive Flat Panel Displays, saying they are technologically different from regular monitors.
On the policy side, ICEA wants changes to the MOOWR scheme, including depreciation benefits on capital goods cleared into the domestic market, RoDTEP benefits for MOOWR units, simpler ex-bond procedures and deemed AEO Tier-1 status for such units. It has also sought a standard wastage norm of up to 2% for mobile phone manufacturing, citing unavoidable process losses.
As reported by Moneycontrol, ICEA believes these steps would lower cost distortions, improve ease of doing business and strengthen India’s position as a reliable global electronics manufacturing base at a time of rising geopolitical and supply-chain risks.
