Budget 2024 – Customs duty on mobile phones, chargers and more reduced

• The Budget 2024-25 was tabled today by Finance Minister Nirmala Sitharaman.
• The budget has proposed a reduction in BCD for mobile phones, chargers and mobile PCBA.
• The reduction in BCD is expected to bring down the cost of imported mobile phones.

Finance Minister Nirmala Sitharaman today presented the Union Budget 2024-25 in the parliament, unveiling the budget for the fiscal year 2024-25. This is the first budget in the third term of the Narendra Modi-led government.

In a boost to the smartphone industry, the government has announced a reduction in basic customs duty (BCD) on mobile phones, mobile phone chargers and mobile PCBA.

Reduced customs duty on mobile phones

The government has reduced the BCD on mobile phones, mobile phone chargers and mobile PCBA to 15% from the existing 20%. The government had increased the BCD on these parts from 15% to 20% in 2018.

This reduction in customs duty will help in reducing the cost of mobiles and chargers that are imported from other countries, including select iPhones that are still imported.

“The Budget 2024 decision to reduce BCD on mobile phones, PCBA, and chargers while simultaneously extending exemptions on inputs/raw materials for smartphone manufacturing, capital goods, and inputs for capital goods in the electronics industry is a welcome move that will encourage the domestic electronics manufacturing ecosystem,” said Muralikrishnan B, President, Xiaomi India.

A lot of companies also import PCBAs for the devices and they should also record a decrease in costs.

At this moment, it is not clear how much of the benefit will be passed on to the consumers.

In February 2023, the government reduced the customs duty on camera lenses used in smartphones from 2.5% to nil.

“Transsion India welcomes the Ministry of Finance's decision to reduce the BCD from 20% to 15% on mobile phones, mobile PCBA and chargers. This move will make smartphones more affordable and help us offer the best-in-class smartphones to the ever-evolving Indian market,” said Arijeet Talapatra, chief executive officer, Transsion India.

Experts predict a small price cut

Despite the reduction in BCD, experts have said that a major price cut must not be expected.

“The reduction of BCD on smartphones, chargers and PCBA will not have any major impact on the prices of smartphones. We may expect a price cut of 1-2% on average from this move, however, this depends on OEMs if they want to pass this to end consumers. In the lower price segments, we may not see this as in these price segments, the margins are very low,” said Tarun Pathak, Research Director, Counterpoint Research.

“However, on the overall electronics manufacturing, the government has focused on a very key area, which is upskilling. Announcements regarding upskilling shows the government intent to grow high-skilled labor force and will help the electronics manufacturing sector securing high-skilled local talent,” he added.

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