Union Budget 2025 – Key Tech Announcements & What They Mean, Industry Reacts

Highlights

• Union Budget 2025 made several announcements to boost electronics manufacturing and EVs.
• Removed customs duty on machinery for lithium-ion battery production, cut basic customs duty on key smartphone components and exempted 35 capital goods from customs duty for EV battery production.
• It also lowered basic customs duty on luxury motorcycles and completely built-up passenger cars, increased duties on interactive flat-panel displays and reduced customs duty on open-cell TV panels.

The Union Budget 2025 brings a strong focus on boosting electronics manufacturing, electric vehicles (EVs) and clean energy.

From tax cuts to duty adjustments, these measures aim to strengthen India’s tech and mobility sectors while making products more affordable for consumers.

Top Tech Highlights from Budget 2025

Big Push for Mobile Phone Manufacturing

To boost local smartphone production, the government has:

• Removed customs duty on 28 capital goods and machinery used for making lithium-ion batteries in mobile phones.
• Cut the basic customs duty (BCD) on key smartphone components like PCBA, camera modules, connectors, USB cables and fingerprint sensors from 2.5% to zero.

This is expected to attract more investments into India’s growing smartphone industry.

EV Battery Production Gets a Boost

The government is making EV manufacturing cheaper by:

• Exempting 35 capital goods from customs duty for lithium-ion battery production.
• Encouraging local battery cell manufacturing to reduce import dependency and lower EV costs.

New Tax Rules for Motorcycles & Cars

• Lowered basic customs duty on motorcycles over 1600cc.
• Revised import duties on luxury motorcycles and completely built-up (CBU) passenger cars.

This will impact pricing in the premium automotive segment.

Import Duty Changes for TVs

• Increased import duties on interactive flat-panel displays (IFPDs) from 10% to 20%.
• Reduced customs duty on open-cell TV panels to 5%, making LED and LCD TVs cheaper for consumers.

Clean Tech Manufacturing Gets a Push

To support India’s shift to green energy, the government is promoting the local production of –

• Solar PV cells
• Electrolyzers
• Wind turbines
• High-voltage transmission equipment

Smart Meters & Consumer Electronics Get Cheaper

The BCD on Smart Meters has been cut from 25% to 20% making them more affordable for power companies and consumers.

Easier Rules for Electronics & IT Hardware

A light-touch regulatory framework will be introduced to reduce compliance hurdles for manufacturers.

Strengthening India’s Role in Global Supply Chains

The budget highlights financial support for key sectors like:

• EV batteries
• Semiconductors
• Advanced display technologies

This will help Indian manufacturers integrate better into global supply chains.

Boost for R&D in Electronics & Mobility

The government plans to launch a Deep Tech Fund of Funds to support:

• AI research
• Semiconductor development
• Battery technology

Better Warehousing for Electronics Exports

To support high-value electronics exports, the government will:

• Upgrade air cargo warehousing.
• Streamline customs clearance.

These changes in Budget 2025 will reduce costs, boost local production, and encourage innovation, making India a stronger player in tech, mobility and clean energy.

Industry Reacts

Ravi Kunwar, VP and CEO, HMD India and APAC, said, “The Union Budget 2025-26 presents encouraging prospects for the technology and digital infrastructure sector. We applaud the Indian Government for reinforcing India’s vision for self-reliance and innovation-driven growth in electronics manufacturing. Reducing BCD to 5% on open cell components and including 28 additional capital goods for mobile battery fabrication will strengthen local manufacturing and further generate employment in the sector. The formation of the National Manufacturing Mission and investment in skilling initiatives will contribute to India’s global competitiveness and facilitate the commitment to climate-friendly development. These measures, coupled with tax reforms and incentives, create a strong foundation for sustainable growth in India’s electronics ecosystem.”

CP Khandelwal, CEO, PR Innovation, Brand Custodian of Amazfit India, said, “Accelerating tech self-reliance by boosting display manufacturing and lithium-ion battery production. Also added, “The Budget 2025’s tech-forward policies signal India’s ambition to dominate the global electronics value chain. Eliminating BCD on open cell components for displays isn’t just a tariff tweak—it’s a strategic unlock. By making India a cost-competitive hub for advanced display manufacturing, we’re poised to cut reliance on imports for LCD/LED panels, which currently account for 80% of the $7 billion display market. This will catalyze local R&D in next-gen technologies like OLED and MicroLED, critical for smartphones, wearables, and smart TVs. Equally transformative is the lithium-ion battery push. Adding 28 capital goods for mobile batteries will fast-track domestic cell manufacturing, addressing a critical gap where India imports 90% of its lithium-ion needs. For the wearables and smartphone ecosystem, this means shorter supply chains, faster innovation cycles, and sustainable cost efficiencies. India’s future will be driven by innovation, self-reliance, and a bold vision to lead the global tech revolution.”

Rajeev Singh, Managing Director, BenQ India and South Asia said, “We are encouraged by the government’s announcement of the National Manufacturing Mission, which represents a significant step towards enhancing the ‘Make in India’ initiative. This mission’s focus on supporting small, medium, and large industries, along with its emphasis on clean technology manufacturing, aligns perfectly with our commitment to sustainability and innovation.”

Ujjwal Sarin, Founder – Nu Republic: Strengthening Make in India said, “The Union Budget’s National Manufacturing Mission is a pivotal step in strengthening ‘Make in India’ through policy support and clean tech innovation. With a strong focus on domestic manufacturing of solar PV cells, EV batteries, and high-voltage equipment, India is set to lead in sustainable technology. Addressing the inverted duty structure, the increase in customs duty on interactive flat panel displays will boost local production and investment in advanced display technologies. Additionally, the establishment of five National Centers of Excellence for Skilling and a ₹500 crore AI Centre of Excellence in education will bridge the industry-academia gap, fostering a future-ready workforce.”

“These initiatives reinforce India’s path to becoming a global leader in advanced manufacturing and digital innovation. We welcome these efforts and look forward to collaborating with stakeholders to drive technological self-reliance and growth, Sarin further added.

Prashant Bora, MD & CEO of OTEK (A Bora Multicorp Venture), said: “The FM’s proposal to reduce of the customs duty on open cells and other critical electronics components to 5% will help boost the Make in India initiative. This will help electronics brands to support customers with more cost-effective pricing, leading to enhanced scalability and growth. Furthermore, the budget’s emphasis on positioning India’s aspirations to become a global electronics hub through the production-linked incentive (PLI) schemes for electronics and IT hardware manufacturing, further boosted by PM Narendra Modi’s target of $500 billion by FY30, coupled with the government’s bid to strengthen India’s startup ecosystem with an additional INR 10,000 crore Fund of Funds will be a catalyst for growth going forward.”

FAQs

Q1. What measures Union Budget 2025 announced for boosting mobile phone manufacturing in India?

Answer. The government has removed customs duty on 28 capital goods and machinery used for making lithium-ion batteries in mobile phones and cut the basic customs duty on key smartphone components from 2.5% to zero.

Q2. How is the Union Budget 2025 supporting EV battery production?

Answer. The government is exempting 35 capital goods from customs duty for lithium-ion battery production and encouraging local battery cell manufacturing to reduce import dependency and lower EV costs.

Q3. What are the new import duty changes for TVs in the Union Budget 2025?

Answer. The government has increased import duties on interactive flat-panel displays from 10% to 20% and reduced customs duty on open-cell TV panels to 5%, making LED and LCD TVs cheaper for consumers.

Q4. What is the focus of the IndiaAI Safety Institute announced at the Union Budget 2025?

Answer. The IndiaAI Safety Institute will collaborate with academia, startups, industry, and government bodies to ensure AI safety, security, and trust, focusing on indigenous R&D and using Indian datasets tailored to the country’s diversity.

Q5 How does the Union budget 2025 support R&D in electronics and mobility?

Answer. The government plans to launch a Deep Tech Fund of Funds to support AI research, semiconductor development and battery technology.

Also Read: Electrical Vehicles in India: Future Prospects