The Central Board of Indirect Taxes and Customs (CBIC) on 9 July issued three separate notifications rolling out customs duty relief on a wide range of components and capital goods used in manufacturing electronic goods, including smartphones and lithium-ion batteries. The move is aimed at lowering import costs, improving cost competitiveness, and deepening domestic value addition across electronics and electric vehicle supply chains.

Key Developments

The first notification exempts five components used in manufacturing display assemblies for automotive, medical, and industrial applications from basic customs duty until 31 March 2029. The exempted components include cells, flexible printed circuit assemblies (FPCAs), backlight units, frames, and anisotropic conductive film (ACF). Notably, the exemption does not extend to display assemblies for mobile phones, smartwatches, smart meters, television panels, and interactive flat-panel displays.

A second notification extends zero customs duty until 31 March 2029 on six components used in manufacturing inductor coil modules for wireless charging in cellular mobile phones. These include nano-crystalline assemblies, E-shields, PET liners, PC shims, stranded and NFC coils, and neodymium-iron-boron (NdFeB) magnets.

Expanded Capital Goods List for Lithium-Ion Cell Manufacturing

The third notification replaces the existing list of machinery eligible for concessional customs duty in lithium-ion cell manufacturing with a significantly expanded list of 85 capital goods. The revised list covers coating machines, winding machines, welding systems, testing equipment, formation machines, drying systems, and other specialised equipment used across the lithium-ion cell production process.

This expansion is expected to meaningfully reduce the cost of setting up and scaling lithium-ion cell manufacturing facilities in India — a critical input for both consumer electronics and electric vehicles.

Why It Matters

The duty waivers and concessions are valid until 31 March 2029 and are designed to reduce the landed cost of critical imported inputs. This comes amid the government's sustained push to build domestic manufacturing capabilities in advanced electronics, battery technology, and electric mobility — sectors identified as strategic priorities under India's industrial policy framework.

The move reinforces a broader pattern of targeted duty interventions that complement existing production-linked incentive schemes for electronics and EV components. By lowering input costs, the Centre is attempting to make domestically assembled products more price-competitive against fully imported alternatives.

What Happens Next

Industry stakeholders in the smartphone, EV battery, and industrial electronics segments are expected to benefit from reduced procurement costs in the near term. The expanded capital goods list for lithium-ion manufacturing, in particular, could accelerate investment decisions by battery cell makers looking to establish or expand facilities in India. The concessions will remain in force through the end of financial year 2028-29.