ICEA Bats for Cut in Duties on Parts, Components To Spur Electronics Manufacturing

The India Cellular and Electronics Association (ICEA) has advocated reduction of duties on parts and components while calling for simplification of tariff structure into `3+1 slabs', as the industry body termed India's current tariff regime as among the most complex globally.

In its Budget recommendations for 2025-26, the association said high tariffs on sub-assemblies and their components inflate manufacturing costs, limiting India's competitiveness.

It has suggested removal of 2.5 per cent duty on parts and inputs of PCBA (printed circuit board assembly), FPCs (flexible printed circuit), camera modules, and connectors.

"Reduce the 2.5 per cent duty on parts and inputs of PCBA, FPCs, camera modules, and connectors to 0 per cent," ICEA has said in its budget wishlist.

"India's current tariff regime is among the most complex globally, with multiple rates (nil, 2.5 per cent, 5 per cent, 7.5 per cent, 10 per cent, and 15 per cent plus surcharges). This complexity, especially on sub-assemblies and components, impacts global competitiveness and export potential," it noted.

ICEA has called for a simplified tariff structure into 3+1 slabs -- nil for parts/inputs and sub-parts of sub-assemblies/components; at five per cent for parts of certain components; at ten per cent for sub-assemblies and components; and 15 per cent for finished goods.

It has also pitched for the reduction of duties on open cell inputs for television manufacturing.

"The current 2.5 per cent tariff on inputs hinders competitiveness and discourages local production because of lack of sufficient differential duty...Reduce the duty on sub-assembly inputs for open cells to 0 per cent (nil) to support domestic television manufacturing," it said.

ICEA favoured rationalisation of duties on components for hearable devices, saying that in order to support the nascent domestic industry for hearable devices, it is essential to maintain the existing duty structure while ensuring components and inputs are duty-free.