Budget 2025: India’s Import Duty Cuts to Benefit Apple, Xiaomi

India has removed import duties on key components needed to produce mobile phones, announced Finance Minister Nirmala Sitharaman in the annual budget on Saturday. This move is expected to boost local production and benefit companies like Apple and Xiaomi. Over the past six years, India’s electronics production has more than doubled to $115 billion in 2024, making it the world’s second-largest mobile phone manufacturer.

In 2024, Apple led the Indian smartphone market with a 23% share of total revenue, followed by Samsung at 22%, according to research firm Counterpoint. The components now receiving duty cuts include parts for assembling mobile phones such as printed circuit board assemblies, camera modules, and USB cables, which were previously taxed at 2.5%. The move is seen as a way for India to strengthen its position in the global mobile phone market.

This decision also comes at a time when global trade faces challenges due to U.S. President Donald Trump’s tariff policies. India aims to take advantage of U.S.-China trade tensions and attract more manufacturing units to the country. With lower tariffs, India hopes to stay competitive against countries like China and Vietnam, which are strong players in smartphone exports.

Last year, India's IT ministry warned that the country could lose out in the smartphone export race if it did not reduce tariffs to attract global companies. In her budget last year, Sitharaman announced a review of the country’s customs duty rates to simplify tariffs and make trade easier. The duty review also aims to eliminate “inverted duty structures,” where raw materials are taxed higher than finished products, which can hinder local production.

This new tariff change is seen as a positive step for India’s growing electronics industry.