Budget 2026: ICEA Seeks Customs Duty Relief to Shield Electronics Supply Chain from China Curbs

Ahead of Union Budget 2026, the India Cellular and Electronics Association (ICEA) has submitted a set of recommendations to the government, pointing to China’s recent export restrictions as a key reason for easing customs duties. ICEA represents leading global and domestic electronics players, including Apple, Foxconn, Dixon, Xiaomi, Vivo and Oppo. The industry body has urged the government to lower duties on mobile phone components, capital goods and wearables to help reduce handset manufacturing costs in India.

Union Budget 2026: Customs Duty Exemptions Sought Amid China Supply Constraints
“China’s recent export controls on manufacturing machinery have increased supply-chain risks, making India’s dependence on imported equipment a strategic concern. We therefore recommend that the government extend the existing zero-duty benefit on capital equipment to include all constituent components, sub-assemblies and assemblies imported specifically for manufacturing,” ICEA said, according to a PTI report.

The association highlighted that several specialised machines needed for mobile phone and lithium-ion cell manufacturing are still not covered under current duty exemption notifications. While the Union Budget 2025–26 had provided relief on a range of capital goods, these critical machines remain excluded, leading to higher project costs and incomplete manufacturing lines.

“These machines are not manufactured domestically, and importing them attracts substantial duties, increasing capital expenditure by around 7.5 to 20 per cent,” ICEA said.

Union Budget 2026: Strengthening Domestic Lithium-Ion Cell Manufacturing
Against the backdrop of global supply-chain disruptions and China’s restrictions on battery materials, ICEA stressed the urgency of scaling up domestic lithium-ion cell manufacturing. “Extending duty exemptions will help reduce setup costs, speed up commissioning, improve export competitiveness and generate employment across the energy storage ecosystem,” the association noted.

ICEA also recommended that import duty exemptions be extended to machinery used in lithium-ion cell production, helping India advance self-reliance in the electronics value chain.

Union Budget 2026: Rationalising Duties on Display Panels and Components
The association has also called for rationalisation of taxes on display panels used in smartphones, tablets and automotive dashboards. Its key suggestions include applying a 15 per cent import duty on fully assembled displays used in electronics manufacturing, while exempting all components required for manufacturing display assemblies from customs duty to encourage localisation.

Union Budget 2026: Cutting Import Duty on PCB Assemblies
ICEA further proposed reducing the import duty on printed circuit board assemblies (PCBA) from 15 per cent to 10 per cent.

“As PCBA manufacturing is already significantly localised, a duty reduction will not hurt domestic producers. Instead, it will improve cost competitiveness, promote fair market behaviour by discouraging arbitrary pricing, and further strengthen India’s electronics manufacturing ecosystem,” the association said.

Union Budget 2026: Lower Duties Proposed for Hearables and Wearables
The industry body has also sought a reduction in basic customs duty on finished hearables and wearables from 20 per cent to 15 per cent, aimed at making audio and wearable devices more affordable.

“A calibrated reduction will not undermine domestic manufacturing but will reinforce India’s image as a forward-looking, market-friendly economy. A 15 per cent rate aligns with India’s move towards a more uniform and moderate peak tariff structure, supporting market access, scale and affordability,” ICEA said.

Mobile Industry Pushes for Budget 2026 Reforms
Overall, ICEA’s proposals centre on lowering import duties, widening exemptions for critical machinery and rationalising taxes on key components. The association believes these steps will help bring down production costs, strengthen domestic manufacturing, boost exports and employment, while addressing supply-chain risks arising from global trade restrictions.