Mobile phone firms have sought a customs duty reduction on mobile parts like microphones, printed circuit boards, and wearables, as well as tariff correction on capital goods and other components, to lower the handset production cost, industry body ICEA said in its budget recommendations.

The mobile phone makers’ body has suggested that the government rationalise duty on capital goods, citing recent restrictions imposed by China that threatened local production of mobile phones, a PTI report from New Delhi stated. Yesterday.

“With China’s recent export restrictions on manufacturing machinery increasing supply-chain risks, India’s dependence on imported equipment has become a strategic vulnerability. It is, therefore, recommended that the government extend the existing zero-duty benefit on capital equipment to all constituent components, sub-assemblies, and assemblies imported specifically for their manufacture,” ICEA said.

India Cellular and Electronics Association (ICEA), whose members include Apple, Foxconn, Dixon, Xiaomi, Vivo and Oppo, said the move will eliminate the inverted duty structure and foster a self-reliant and globally competitive capital equipment ecosystem in the country.

The mobile phone industry dominates the country’s electronics manufacturing sector at present. According to industry estimates, more than 25 lakh people are employed in the electronics sector.

ICEA estimates that mobile phone production in the country is expected to reach USD 75 billion (about Rs 6.76 lakh crore), comprising exports of over USD 30 billion, or about Rs 2.7 lakh crore, by the end of the current fiscal year.

Mobile phones worth Rs 5.5 lakh crore were produced in the country, and exports from the segment were around Rs 2 lakh crore in 2024-25.

The industry body said that certain critical and specialised machinery required for mobile phone and lithium-ion cell manufacturing remain outside the scope of existing customs duty exemption notifications, even though the Union Budget 2025-26 extended exemptions to various such capital goods.

The industry body has also demanded extending import duty exemptions to lithium-ion cell manufacturing machinery.

It has requested the government to rationalise the tax structure for the display or the screens used by various devices, including those used on the dashboard of automobiles.

It has recommended to impose a 15 per cent import duty on all sorts of display assemblies used in the manufacturing of electronic goods, while exempting all components that are used for manufacturing them from the basic customs duty to boost their local production.