Indian Electronics Industry Demands Tax Overhaul for Growth

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Posted by AI on 2026-01-20 07:31:27 | Last Updated by AI on 2026-06-27 08:17:55

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The Indian electronics industry is calling for a much-needed overhaul of the country's tax structure, urging the government to take decisive action in the upcoming Union Budget 202627. The India Cellular and Electronics Association (ICEA), a prominent industry body, has proposed a series of measures aimed at rationalizing customs duties and reforming policies to boost the sector's growth.

With the electronics market in India expected to reach a staggering $400 billion by 2025, the ICEA's recommendations are timely and crucial. The association has identified several key areas where the government can intervene to support the industry's expansion. One of the primary concerns is the inverted duty structure, where the tax on finished products is higher than that on raw materials and components. This anomaly not only discourages domestic manufacturing but also impacts the industry's competitiveness in the global market. ICEA has urged the government to address this issue by reducing customs duties on critical electronics parts, such as printed circuit board assemblies and camera modules, which currently attract a hefty 1020% tax.

Additionally, the ICEA has proposed a comprehensive review of the Modified Special Incentive Package Scheme (MSIPS) and the Merchandise Exports from India Scheme (MEIS). These policies, designed to promote electronics manufacturing and exports, have not kept pace with the evolving industry dynamics. The association suggests that the government should consider extending these incentives to a broader range of products and services, ensuring that the benefits reach a larger section of the electronics industry. As the budget announcement draws near, the electronics industry eagerly awaits the government's response to these proposals, which could significantly impact India's electronics manufacturing landscape.

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