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In a recent announcement during the annual budget speech on Saturday, Finance Minister Nirmala Sitharaman revealed that India has eliminated import duties on essential components for mobile phone production, a move that is set to invigorate local manufacturing initiatives and provide advantages to companies like Apple and Xiaomi.

Over the past six years, India has witnessed a substantial growth in electronics production, which surged to $115 billion in 2024, positioning the country as the world's second-largest mobile phone producer.

Notably, Apple led the Indian smartphone market in 2024, capturing a 23% revenue share, closely followed by Samsung at 22%, as reported by research firm Counterpoint.

The exempted components encompass crucial elements for mobile phone assembly, including printed circuit board assembly, parts of camera modules, and USB cables, which were previously subjected to a 2.5% tax.

These revisions aim to fortify India against potential disruptions in global trade, partially spurred by U.S. President Donald Trump's tariff uncertainties.

While Trump focuses on promoting "America First" policies to repatriate manufacturing facilities to the U.S., India is leveraging U.S.-China trade tensions to bolster its position in global supply chains.

On the domestic front, India's IT ministry cautioned about potential setbacks in smartphone exports compared to China and Vietnam if tariff reductions to entice global companies were not implemented.

Sitharaman, in the preceding year's budget, had announced a comprehensive review of the country's customs duty structure with the objective of streamlining and simplifying tariffs to facilitate trade.

The review also targeted the elimination of inverted duty structures, situations where tariffs on raw materials or intermediary goods surpass those on the final products they are utilized in producing.

India's intricate tariff system is frequently identified as a barrier to efficient local manufacturing and a source of contention.