Shares of Dixon Technologies, Syrma SGS, and Amber Enterprises surged following the government's announcement of customs duty relief on equipment and parts used in lithium-ion batteries and other electronic components. The benefits, effective immediately, aim to lower import costs and encourage investments in domestic manufacturing sectors until March 31, 2029.
The government's decision is expected to reduce the cost of importing specialized machinery and components not widely produced in India, thereby fostering fresh investments in battery cell manufacturing, automotive electronics, and advanced electronics assembly. The most significant change involves lithium-ion battery manufacturing, with the Central Board of Indirect Taxes and Customs (CBIC) revising the list of eligible machinery to cover 85 types of equipment. Additionally, customs duty concessions have been extended to six components used in inductor coil modules for wireless charging in mobile phones.
In a separate notification, customs duty relief was announced for five key components used in display assemblies for automotive, medical, and industrial applications. These measures are part of the government's broader strategy to enhance domestic manufacturing capabilities and build resilient supply chains in electronics and electric mobility sectors.
“This is going to run for decades from now.”
Harshit Kapadia, Vice President at Elara Securities
Dixon Technologies, India's largest domestic contract manufacturer of smartphones and electronics, is expected to benefit from lower input costs, potentially improving unit economics and supporting the company's expansion. Syrma SGS Technologies is likely to gain competitiveness in the domestic production of magnetic products due to the duty relief on components used in inductor coil modules. Amber Enterprises could see improved project viability and support for future capacity additions in its expanding electronics manufacturing services (EMS) business.
India's Electronics Manufacturing Services sector has experienced significant growth, expanding from $10 billion to $40 billion in five years. According to Harshit Kapadia, Vice President at Elara Securities, this growth trajectory is expected to continue, driven by global supply chain diversification, India's manufacturing cost advantage, and government policy initiatives.
Background
India's electronics manufacturing sector has seen rapid growth, with the EMS sector expanding fourfold in five years. The government's policy measures aim to further enhance domestic capabilities and position India as a key player in the global electronics supply chain.
Looking ahead, the customs duty relief is poised to strengthen India's position in the global electronics manufacturing landscape. Stakeholders should monitor the impact of these measures on domestic manufacturing capabilities and the broader economic implications in the coming years.
