India Extends Customs Duty Concessions for Electronics Manufacturing, Boosting Shares of Key Players
The policy change, effective immediately, covers equipment and parts for lithium-ion batteries, display modules, and smartphone components, and will remain in place until March 31, 2029, as reported by the Central Board of Indirect Taxes and Customs (CBIC).
Government Extends Duty Concessions to Accelerate Domestic Production
The revised exemptions aim to lower the cost of importing specialized machinery not widely produced in India, while encouraging investments in battery cell manufacturing, automotive electronics, and advanced electronics assembly. The CBIC’s notification replaced the previous list of eligible machinery with a revised one covering 85 types of equipment, according to an official statement. This includes machinery for material mixing, coating, pressing, and electrolyte filling, as well as auxiliary systems like solvent recovery and effluent treatment.
The government also extended duty relief to six components used in inductor coil modules for wireless charging in mobile phones, such as nano-crystalline assemblies and neodymium magnets. Additionally, customs duty concessions were granted for five components in display assemblies for automotive, medical, and industrial applications, including display cells and anisotropic conductive film (ACF).
Impact on Key Players: Dixon, Syrma, and Amber Benefit
Dixon Technologies, India’s largest domestic contract manufacturer of smartphones and IT hardware, saw its shares rise 5% to ₹13,525 on the BSE. The company is expected to benefit from reduced input costs, which could improve unit economics and support margin growth. Syrma SGS Technologies, with a presence in the domestic production of magnetic products like inductor coils, jumped 6% to ₹1,440, as duty relief on components used in wireless charging modules is likely to enhance its competitiveness against Chinese imports.
Amber Enterprises, which operates in electronics manufacturing services (EMS), gained 3% to ₹7,645 per share. The company’s expanded EMS business is poised to benefit from lower costs for importing specialized machinery. The measure could improve project viability and support future capacity additions.
Broader Economic Implications: Strengthening Domestic Supply Chains
The measures are part of India’s broader strategy to bolster domestic manufacturing capabilities and build resilient supply chains in sectors linked to electronics and electric mobility. The government has allocated ₹40,000 crore for the EMS sector. This aligns with global trends of supply chain diversification.
Harshit Kapadia, Vice President at Elara Securities, emphasized the long-term potential of India’s electronics manufacturing services (EMS) sector. “This is going to run for decades,” he told ET Now, citing factors such as India’s manufacturing cost advantage and renewed policy support. The EMS sector has grown from $10 billion to $40 billion in five years.
Expert Analysis: Policy Shifts Favor Long-Term Growth
The duty concessions are expected to accelerate investments in lithium-ion battery production. The revised machinery list includes equipment for every stage of battery manufacturing, from material processing to packaging, according to the CBIC’s notification.
The policy addresses the cost of importing specialised machinery and components that are not widely produced in India. By reducing import costs, the government aims to make India a more attractive destination for global electronics firms looking to diversify their supply chains.