Government waives import duty on inputs for manufacturing batteries, display assemblies

4 min readNew DelhiJul 10, 2026 01:03 AM IST

A finance ministry official said the duty exemptions on specified inputs and parts are intended to provide an impetus to domestic manufacturing of display assemblies used in the automotive, medical and industrial sectors.

The Union finance ministry has exempted customs duty on 85 capital goods used in lithium-ion cell manufacturing, as well as on inputs used in the manufacture of display assemblies and inductor-coil modules for wireless charging in cellular mobile phones, till March 2029 to promote domestic manufacturing in the electronics sector.

The items exempted from customs duty include backlight units, frames, anisotropic conductive film, cathode and anode extrusion coating machines, powder dryers and slurry transfer systems.

The import duty exemption for inputs used in the manufacture of inductor-coil modules for wireless charging in cellular mobile phones will further deepen value addition in mobile phone manufacturing, the official said.

On the duty exemption for capital goods used in lithium-ion cell manufacturing, the official said the earlier exemption was linked to lithium-ion cells used in specific types of batteries, such as those for mobile phones, electric vehicles and energy storage systems.

“This notification merges the existing entries for specified capital goods used in the manufacture of lithium-ion cells and removes the restriction linked to specific downstream battery applications, and this will support lithium-ion cell manufacturing for batteries used across electronics, electric mobility, energy storage and other applications,” the official said.

Experts said the government is gradually integrating India into the global electronics and smartphone value chain by extending duty relief to specified components used in smartphone and electronics manufacturing.

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The expanded list of 85 exempted capital goods for lithium-ion cell manufacturing is expected to accelerate investments in domestic battery manufacturing, a strategically important segment for smartphones, consumer electronics and electric mobility.

Manoj Mishra, Partner and Tax Controversy Management Leader at Grant Thornton Bharat, said the government’s decision to grant duty exemptions is another significant step

towards strengthening India’s electronics manufacturing ecosystem. “By reducing the import cost of critical components and capital goods, these measures are expected to improve cost competitiveness, encourage greater domestic value addition, and support the localisation of high-value manufacturing in smartphones and other electronic products. The exemption for inputs used in display assemblies for automotive, medical and industrial applications broadens support beyond consumer electronics, while the relief for inductor coil modules used in wireless charging will benefit smartphone manufacturers adopting advanced features. The expanded list of 85 exempted capital goods for lithium-ion cell manufacturing is likely to accelerate investments in domestic battery manufacturing, an area that is strategically important for smartphones, consumer electronics and electric mobility,” Mishra said.

Senior Research Fellow at the Academy of Business Studies (ABS), KS Chalapati Rao, said in a note on Thursday that electronics manufacturing, a key component of the Production Linked Incentive (PLI) scheme and the broader domestic manufacturing push, saw new equity inflows almost halve in FY26 compared with FY25. “Electronics FDI fell from $2.04 billion (FY25) to $1.15 billion (FY26) despite record aggregate inflows. One possible interpretation is that the initial investment cycle associated with the PLI programme is moderating. Confirmation, however, requires firm-level evidence,” Rao said.

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In a Lok Sabha reply last July, Minister of State for Electronics and Information Technology Jitin Prasada said the number of mobile manufacturing units in India had increased to 300 in 2024-25 from just two in 2014-15. Mobile phone production rose 28-fold to Rs 5.45 lakh crore, while exports increased 127-fold to Rs 2 lakh crore.

Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, specializing in economic policy and financial regulations. With over five years of experience in business journalism, he provides critical coverage of the frameworks that govern India's commercial landscape.

Expertise & Focus Areas: Mishra’s reporting concentrates on the intersection of government policy and market operations. His core beats include:

Trade & Commerce: Analysis of India's import-export trends, trade agreements, and commercial policies.

Banking & Finance: Covering regulatory changes and policy decisions affecting the banking sector.

Professional Experience: Prior to joining The Indian Express, Mishra built a robust portfolio working with some of India's leading financial news organizations. His background includes tenures at:

Mint

CNBC-TV18

This diverse experience across both print and broadcast media has equipped him with a holistic understanding of financial storytelling and news cycles.

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