Union Budget 2024-25: Mobile phones to get cheaper as Finance Minister Nirmala Sitharaman cuts basic customs duty to 15%

Finance Minister Nirmala Sitharaman on Tuesday announced a 15 per cent cut in basic customs duty (BCD) on mobile phones while presenting the Union Budget for the financial year 2024-25 in Parliament.

BCD on mobile phones as well as mobile printed circuit board assembly (PCBA) and mobile chargers will be reduced to 15 per cent.

Sitharaman said, “With a three-fold increase in domestic production and an almost 100-fold jump in exports of mobile phones in the last 6 years, the Indian mobile industry has matured. In the interest of consumers, I now propose to reduce the basic customs duty (BCD) on mobile phones, mobile printed circuit board assembly (PCBA) and mobile chargers to 15 per cent.”

The reduction in BCD will make mobile phones and related accessories more affordable to consumers.

By reducing the cost of imported components and finished products, the government aims to pass on the benefits to the end consumers, which is likely to lead to reduction in retail prices.

The move is expected to boost demand and enhance access to mobile technology across various segments of the population.

For the domestic mobile phone industry, lower BCD is expected to enhance competitiveness and encourage further investments.

Manufacturers can benefit from lower import costs for essential components, improving their production efficiency and profit margins.

According to International Data Corporation’s Worldwide Quarterly Mobile Phone Tracker, India’s smartphone market saw shipments of 34 million units in the first quarter of 2024.

This represents an increase of 11.5 percent year-on-year, marking the third consecutive quarter of shipment growth.

Earlier, in a bid to strengthen the Indian start-up eco-system, boost the entrepreneurial spirit and support innovation, Finance Minister Nirmala Sitharaman had proposed abolishing the so-called angel tax for all classes of investors.

This has been a long-standing proposal from the industry, and this announcement will encourage more investments, especially towards startups. Startups act as engines of economic growth, playing a vital role in generating new jobs, ideas, products, and services.