India scraps import duties on some parts used to make devices like phones until March 31, 2029, removing 7.5% and 5% levies, which might help Apple and Xiaomi
Context & Ripple Effects
India has been progressively lowering tariffs on phones and components while pairing tariff relief with policies intended to expand domestic smartphone manufacturing. Earlier coverage identified Apple and Xiaomi among the companies positioned to benefit.
The policy arc has also moved beyond simple tariff cuts: India has considered fresh manufacturing subsidies, export-linked incentives, greater local-component use, and tax treatment for equipment supplied to contract manufacturers. The new exemption extends the component-cost relief through March 2029.
First-order effects
- Apple, Xiaomi, and their manufacturing partners can import the covered inputs without the removed 7.5% and 5% duties through March 2029, reducing the cost of devices assembled in India.
- A multi-year end date gives manufacturers more certainty in planning sourcing and assembly operations than a short-lived tariff adjustment would.
Second-order effects
- Contract manufacturers and component suppliers serving phone assembly gain a clearer incentive to expand India-based production, while brands have more room to allocate Indian-made output across domestic and export markets.
- The relief may sharpen competition among handset makers on pricing and production economics, but its benefit will depend on which inputs remain covered and on the separate push for locally sourced components.
Third-order effects
- India is building a more layered industrial policy for electronics: lower input costs are being combined with incentives tied to exports, local content, and manufacturing investment rather than relying on handset tariffs alone.
- If these measures persist, the key test will shift from attracting final assembly to developing a deeper local component base; continued dependence on exempt imports would limit that transition.
The trend: This is another step in India’s shift from protecting finished-device production toward using targeted tariff and incentive policy to make its electronics manufacturing ecosystem more competitive.