India Slashes Import Duties on Smartphone Parts, Boosting Apple and Xiaomi Amid Global Trade Shifts
In a strategic move to bolster its position in the global tech supply chain, India has scrapped import duties on key smartphone components, Finance Minister Nirmala Sitharaman announced during the annual budget presentation on Saturday. The decision is set to benefit major players like Apple and Xiaomi, fueling local manufacturing and strengthening India’s status as a smartphone production powerhouse.
The tariff cuts apply to essential components such as printed circuit board assemblies, camera module parts, and USB cables, which previously faced a 2.5% import duty. This change is expected to reduce production costs, enhance supply chain efficiency, and attract more foreign investment in India’s rapidly growing electronics sector.
India’s electronics production has more than doubled in the past six years, reaching $115 billion in 2024. The country now ranks as the world’s second-largest mobile phone manufacturer. Apple dominated the Indian smartphone market with a 23% revenue share in 2024, closely followed by Samsung at 22%, according to Counterpoint Research.
This policy shift comes amid global trade uncertainties, including U.S. President Donald Trump's continued push for "America First" policies aimed at bringing manufacturing back to the U.S. However, India sees an opportunity to capitalize on U.S.-China trade tensions, positioning itself as a key alternative in the global supply chain.
Internal reports from India’s IT ministry had previously warned that the country risked losing ground to China and Vietnam in the competitive smartphone export market if it failed to lower tariffs. Sitharaman’s announcement aligns with last year’s budget promise to review and simplify the customs duty structure, targeting the removal of “inverted duty structures,” where raw materials or intermediate goods face higher taxes than the finished products they create.
India’s complex tariff system has long been a hurdle for efficient local production and international trade. By streamlining duties, the government aims to attract more tech giants, boost exports, and cement India’s role as a global manufacturing hub in the face of shifting geopolitical dynamics.