‘Make in India’ boost: Customs duty on some electronics increased to 20%; govt aims to boost locally manufactured goods

The Centre on Wednesday revised customs duties on display-related products to support domestic electronics manufacturing and fix the existing duty structure. The Union finance ministry raised the Basic Customs Duty (BCD) on flat panel displays to 20%, while reducing the duty on open cells and key components to 5%. The changes are aimed towards strengthening India’s manufacturing ecosystem and fixing the inverted duty structure that had made imported finished goods cheaper than locally assembled products. The finance minister said that the move aligns with the government’s manufacturing push. “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% and reduce the BCD to 5% on Open Cell and other components,” she said in a post on social media platfom X. Taking a step towards encouraging local production, the government has fully exempted parts used in the manufacture of open cells for LCD and LED televisions from customs duty. The ministry said this decision builds on earlier reductions announced in previous budgets. “In 2023-24 budget, for the manufacture of Open Cells of LCD/LED TVs, I had reduced the BCD on parts of Open Cells from 5% to 2.5%. To further boost the manufacture of such Open Cells, the BCD on these parts will now sand exempted,” the ministry tweeted. The latest duty overhaul forms a similar model which was earlier adopted in the smartphone manufacturing sector, where phased incentives helped scale up domestic production and positioned India as the world’s second-largest mobile phone producer. Although the higher duty on finished flat panel displays may lead to a temporary increase in prices of imported high-end panels, the government expects the policy to attract greater domestic investment over time. With imported finished displays now attracting a 20% duty, domestic manufacturers and global original equipment makers are likely to accelerate localisation of their supply chains. The is to develop a self-reliant display manufacturing ecosystem that can cater to domestic demand for LCD and LED products and enhance India’s role as an exporter of advanced electronic hardware.