The Union Budget 2025 has introduced key policy changes aimed at strengthening India’s manufacturing capabilities in electronics, electric vehicles (EVs), and televisions (TVs). From tax incentives for local production to import duty adjustments, these measures are set to shape the future of the tech and mobility sectors.
Major Announcements in Budget 2025
1. Boost to Domestic Mobile Phone Manufacturing
To encourage local production of smartphones and accessories, the government has fully exempted customs duty on 28 capital goods and machinery used for lithium-ion battery production in mobile phones. Additionally, the basic customs duty (BCD) on key components such as PCBA, camera modules, connectors, USB cables, and fingerprint sensors has been reduced from 2.5% to zero. This move is expected to drive further investments into India’s thriving smartphone manufacturing ecosystem.
2. EV Battery Production Gets a Push
Electric vehicle (EV) manufacturing received a major boost with 35 additional capital goods being exempted from customs duty for lithium-ion battery production. The government aims to enhance domestic battery cell manufacturing, reducing dependency on imports and lowering costs for EV makers in India.
3. Tax Adjustments on Motor Vehicles and Motorcycles
The budget has introduced duty adjustments for motorcycles and passenger vehicles. While basic customs duty on motorcycles exceeding 1600cc has been reduced, the import duties on completely built-up (CBU) motorcycles and luxury passenger cars have been revised. This move will impact pricing across the premium automotive segment.
4. Changes in Import Duties on TV Panels
The government has increased import duties on interactive flat-panel displays (IFPDs) from 10% to 20% . At the same time, customs duty on open-cell TV panels has been reduced to 5%, making LED and LCD TVs more affordable for consumers.
5. Focus on Clean Tech Manufacturing
Aligned with India’s commitment to sustainable energy and clean technology, the government has announced policies to promote the local manufacturing of solar PV cells, electrolyzers, wind turbines, and high-voltage transmission equipment. These measures will support India’s transition to green energy.
6. Reduction in Tariffs for Smart Meters and Consumer Electronics
The BCD on electricity meters for alternating current (Smart Meters) has been reduced from 25% to 20%, making them more affordable for power distribution companies and consumers.
7. Easing of Regulations for Electronics and IT Hardware
A light-touch regulatory framework will be introduced for the electronics sector to facilitate smoother compliance and reduce bureaucratic hurdles for manufacturers.
8. Strengthening of Global Supply Chain Integration
To integrate Indian manufacturing with global supply chains, specific sectors have been identified for development with financial support, including EV batteries, semiconductor components, and advanced display technologies.
9. Incentives for Local R&D in Electronics and Mobility
A new Deep Tech Fund of Funds will be explored to support next-generation startups, particularly in AI, semiconductor research, and battery technology.
10. Improved Warehousing Infrastructure for Electronics Exports
To support high-value electronics exports, the government has committed to upgrading air cargo warehousing facilities and streamlining customs clearance processes.