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ICEA proposes lowering taxes and tariffs to boost electronic manufacturing
Industry News- Jan 03,25
For the 2025-26 Budget, ICEA has suggested removing the 2.5% duty on parts such as PCBA (Printed Circuit Board Assembly), FPCs (Flexible Printed Circuits), camera modules, and connectors, to make manufacturing more affordable.
The India Cellular and Electronics Association (ICEA) has recommended reducing taxes on parts and components and streamlining India's tariff structure into a simpler "3+1 slabs" system. According to ICEA, India’s current tax framework is one of the most complex in the world, which raises manufacturing costs and hampers global competitiveness.
For the 2025-26 Budget, ICEA has suggested removing the 2.5% duty on parts such as PCBA (Printed Circuit Board Assembly), FPCs (Flexible Printed Circuits), camera modules, and connectors, to make manufacturing more affordable. The proposed tariff structure is as follows:
• 0% duty on parts and sub-parts
• 5% duty on certain component parts
• 10% duty on sub-assemblies and components
• 15% duty on finished goods
Additionally, ICEA recommends eliminating the 2.5% duty on inputs for open cells used in TVs to promote local production and suggests duty-free imports for components used in hearable devices to support the growing industry. It also advocates for maintaining the current tax system for finished products.
In its budget wishlist, ICEA emphasised the need to reduce the 2.5% duty on parts and inputs for various electronic components to 0%, stating that the existing tariff structure—comprising multiple rates (nil, 2.5%, 5%, 7.5%, 10%, 15%, plus surcharges)—complicates the manufacturing landscape. The association believes simplifying tariffs and reducing duties will enhance India’s global manufacturing competitiveness and boost exports.
(TOI)
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