Over the past six years, India's electronics production has skyrocketed, reaching $115 billion in 2024, making it the second-largest mobile phone manufacturer in the world. According to research firm Counterpoint, Apple dominated the Indian smartphone market in 2024, capturing 23% of total revenue, closely followed by Samsung with 22%.
The components that will see duty cuts include items necessary for mobile phone assembly, such as printed circuit board assemblies, camera module parts, and USB cables, which were previously taxed at 2.5%. These reductions will help India navigate a potentially challenging year in global trade, especially in light of U.S. President Donald Trump's tariff threats.
While Trump aims to bring more manufacturing back to the U.S. with his "America First" policies, India is looking to capitalize on the trade tensions between the U.S. and China to enhance its position in global supply chains. Last year, India's IT ministry cautioned that without lowering tariffs, the country could fall behind China and Vietnam in the smartphone export race, as reported by Reuters.
In her budget last year, Sitharaman had mentioned a review of the customs duty structure to simplify tariffs and facilitate trade. This review also aimed to address the issue of inverted duty structures, where tariffs on raw materials or intermediate goods exceed those on the final products. India's complex tariff system is often seen as a barrier to efficient local production and a source of disputes.