India Raises Customs Duty On Electronic Goods: Boosting Domestic Growth And Jobs

India Hikes Customs Duty on Flat Panel Displays, Boosts Domestic Electronics Manufacturing

In a bold move to strengthen India’s position as a global electronics powerhouse, the Union Finance Ministry has announced an increase in the Basic Customs Duty (BCD) on flat panel displays from 10 per cent to 20 per cent. The decision is part of a broader effort to promote domestic manufacturing of electronic goods and correct the country’s inverted duty structure, where components were taxed higher than finished products.

Correcting The Duty Imbalance

To balance the scales, the government has reduced the BCD on open cells and key components for flat panel displays to just 5 per cent. In addition, parts of Open Cells used in LCD and LED TVs are now fully exempt from BCD. “In line with our ‘Make in India’ policy, and to rectify inverted duty structure, I propose to increase the BCD on Interactive Flat Panel Display (IFPD) from 10 per cent to 20 per cent and reduce the BCD to 5 per cent on Open Cell and other components,” Finance Minister announced on social media platform X.

This builds on earlier efforts. In the 2023-24 budget, the BCD on parts of Open Cells was reduced from 5 per cent to 2.5 per cent. With the latest exemption, the government aims to encourage local manufacturing and make India self-reliant in the display segment.

Learning From Smartphones: Phased Manufacturing Pays Off

The policy mirrors the successful phased manufacturing programs in India’s smartphone industry. Over the last decade, these initiatives helped India become the world’s second-largest mobile producer, attracting investments from global OEMs and nurturing a strong domestic ecosystem. The government is now hoping to replicate this success in the flat panel display sector.

Short-Term Price Hike, Long-Term Gain

While consumers may feel a pinch with slightly higher prices for imported high-end panels in the short term, the long-term benefits are expected to be significant. Local manufacturers and global brands will be incentivized to localize supply chains, avoiding the 20 per cent BCD penalty on finished displays. This push is expected to boost domestic investments, create jobs, and foster a self-sustaining display manufacturing ecosystem.

India’s Display Ambition: From Importer To Exporter

Ultimately, the government’s move aims not just to meet domestic demand but to position India as a competitive exporter of high-tech displays. With the combination of protective duties on finished products and exemptions on components, the country is sending a clear message: if you want to play in India’s booming display market, you need to make it here.

(This article has been syndicated from ANI)