Ahead of the Union Budget 2026-27, the Manufacturers’ Association for Information Technology (MAIT) has urged the government to reduce import duties on critical electronic components and extend targeted tax incentives to strengthen domestic electronics manufacturing and enhance global competitiveness.
Call to Reduce Customs Duty on Critical Components
In its pre-budget submission to the Ministry of Finance and the Ministry of Electronics and Information Technology, MAIT recommended lowering the basic customs duty (BCD) on key electronic sub-assemblies from 10 per cent to 5 per cent. The components include:
- Camera modules
- Display assemblies
- Connectors
MAIT said rationalising import duties on components that are not currently manufactured in India would help lower production costs and improve the competitiveness of Indian manufacturers.
Budget 2026 Seen as Strategically Important
The industry body said the upcoming Union Budget carries heightened importance amid global geopolitical tensions, trade and tariff uncertainties, and supply chain disruptions.
According to MAIT, these global challenges have exposed the risks of over-reliance on imports, underscoring the need for stronger domestic manufacturing capabilities.
Support Sought for ICT Adoption and MSMEs
MAIT called for strategic policy interventions, including:
- Increased adoption of ICT and AI
- Improved market access
- Expanded credit guarantee coverage for micro and small enterprises, startups, and export-focused MSMEs
It stressed that rationalising duties on non-domestically produced components is essential to boosting local manufacturing.
Continued Incentives for Mobile Manufacturing (PLI)
The association also recommended continued government support for mobile phone manufacturing, as the production-linked incentive (PLI) scheme for the sector is scheduled to conclude on March 31, 2026.
MAIT noted that India has emerged as a global leader in mobile manufacturing and said the capacity created should be leveraged not only for domestic consumption but also to drive exports.
Duty Relief for Electronic and Audio Components
To promote indigenous component manufacturing, MAIT proposed:
- Reducing all duties on parts and inputs used for inductor coils to zero
- Cutting import tariffs on audio components, such as microphones, receivers, and speakers, from 15 per cent to 10 per cent
The association said these steps would encourage greater domestic value addition.
Push to Make India a Global Repair Hub
MAIT also called for extending the limitation period for the “import of goods for repair and return” from 7 years to 20 years, aligning it with global practices and the typical lifespan of electronic equipment. This, it said, would help position India as a global electronics repair hub.
Direct Tax Proposal to Boost Employment
On the direct tax front, MAIT proposed increasing the lower salary cap for calculating deductions under Section 80JJAA, which incentivises new employment, from ₹25,000 to ₹50,000.
The association said the revision would account for wage inflation and encourage formal job creation.
Budget 2026 a Chance to Strengthen Economic Resilience
MAIT emphasised that the Union Budget 2026 is not merely an annual financial exercise but a key policy instrument to strengthen India’s economic sovereignty and manufacturing resilience.
The association said the Budget offers an opportunity to signal India’s commitment to building a deep, competitive, and globally integrated manufacturing base.
Source: ET