India scraps import duties on electronics and battery inputs to boost local manufacturing

India has removed import duties on a swathe of machinery and components used to make electronics, from lithium-ion battery cells to certain smartphone parts, in the latest push to lower costs for hardware built on its soil.

The measure lands as the country presses to court iPhone and Samsung makers and pull more of the global electronics supply chain away from China.

The Department of Revenue, part of the finance ministry, issued the notification on 8 July, amending an earlier customs order, with the changes taking effect immediately. The exemptions run until 31 March 2029.

At the centre of the package is battery production. The government widened the list of machinery that can be imported duty-free for making lithium-ion cells to roughly 85 categories, covering welding machines, electrolyte injection systems, laser notching equipment, and cell formation and inspection lines, among others.

Officials said around 85% of the components used in lithium-ion cell manufacturing are now exempt from import tax. The change is aimed squarely at the cost of standing up domestic cell plants for phones and electric vehicles.

On smartphones specifically, the notification extends relief to six inputs used in wireless-charging inductor coil modules, including nano-crystalline assemblies, E-shields, PET liners, PC shims, coils, and neodymium magnets. It is a narrow but pointed carve-out for a component that now sits inside almost every modern handset.

The display supply chain also features, though with limits. Five inputs used in display assemblies for automotive, medical, and industrial electronics were granted relief, covering display cells, flexible printed circuit assemblies, backlight units, frames, and anisotropic conductive film.

Crucially, that display concession does not extend to assemblies used in mobile phones, smartwatches, televisions, smart meters, or interactive flat panels.

So while the headline framing is one of duties removed on “some” electronics and smartphone parts, the reality is a targeted list of inputs and factory equipment rather than a blanket cut on finished components.

Investors read the direction of travel quickly. Shares in electronics-manufacturing-services firms including Dixon Technologies, Kaynes Technology, and Amber Enterprises rallied after the notification, on expectations that cheaper inputs will fatten margins across the sector.

The policy fits a longer arc. India has leaned heavily on production-linked incentive schemes to build out phone and component assembly, and mobile phones have become one of its biggest export categories, led by Apple’s supplier network and contract manufacturers such as Foxconn and Tata Electronics.

Those firms have been steadily shifting iPhone output to Indian plants, a realignment underscored by a recent Tata data leak that exposed parts of Apple’s supplier map. Lowering the tax on imported inputs is meant to make that assembly base more competitive against rivals in China and Vietnam, where average tariffs on parts have historically been far lower.

The wider ambition stretches into chips and clean energy. The exemptions dovetail with India’s semiconductor and electronics manufacturing funds, and with a battery push tied to its electric-vehicle goals, all part of an effort to move from assembling imported kits towards making more of each device at home.

The notification also extended relief to certain capital goods and machinery used more broadly across manufacturing, part of a package that industry groups had long lobbied for.

Analysts cautioned that the immediate effect on retail prices may be modest, since the biggest savings accrue to factories and component makers rather than to shoppers buying finished phones off the shelf.

For manufacturers, the immediate benefit is simple arithmetic. Every duty stripped from a coil, a cell, or a piece of factory equipment shaves a little from the landed cost of building in India, and the government is betting those small sums add up to a bigger share of the world’s hardware. Suppliers such as Apple assembler Luxshare have been expanding fast across Asia, and Delhi wants more of that growth to land inside its borders.