Synopsis: CBIC has expanded customs duty exemptions to cover 85 categories of battery manufacturing machinery, along with key display and smartphone components. The move lowers manufacturing costs, supports domestic capacity expansion, and could benefit companies across India’s battery, EMS, and electronics component ecosystem.
The government has expanded customs duty exemptions on key machinery and components used in battery, display, and smartphone manufacturing, reducing the cost of setting up domestic production facilities. While the move does not directly boost revenues, companies already investing in these segments could benefit from lower capital costs and improved long-term manufacturing economics.
Expanded Customs Duty Relief
The Central Board of Indirect Taxes and Customs (CBIC) has issued a fresh set of notifications that meaningfully expand duty exemptions across three manufacturing chains: lithium-ion batteries, display assemblies, and wireless charging modules used in smartphones.
The biggest change is in battery manufacturing. The earlier list of machinery eligible for concessional customs duty has been replaced with a far more comprehensive schedule covering 85 categories of equipment, spanning the entire battery production process: powder preparation, slurry mixing, coating, calendering, slitting, electrode stacking and winding, electrolyte filling, laser welding, formation and aging, testing, inspection, and final packaging. The relief also extends to auxiliary systems such as solvent recovery units, heat recovery equipment, dust collection systems, and effluent treatment plants.
Separately, duty relief continues for five inputs used in display assemblies for automotive, medical, and industrial electronics display cells, flexible printed circuit assemblies, backlight units, frames, and anisotropic conductive film. This exemption does not cover displays meant for mobile phones, smartwatches, TVs, smart meters, or interactive flat panels.
The government has also granted concessional duty on six components used in manufacturing wireless-charging inductor-coil modules for smartphones: nanocrystalline assemblies, E-shields, PET liners, PC shims, coils, and neodymium magnets. CBIC has additionally assigned customs tariff classifications to each machinery category, giving importers more clarity on eligibility.
Together, these changes lower the cost of setting up and operating battery, display, and wireless-charging component plants in India, which could support faster capacity build-out. Here’s a look at companies across the relevant industries that could see some tailwind.
Battery and EV Ecosystem
Exide Industries is one of India’s largest battery manufacturers and is setting up a lithium-ion cell gigafactory in Bengaluru through its subsidiary. The company has been investing heavily in this transition from lead-acid to lithium-ion technology. Cheaper machinery imports across the full cell production chain, electrode processing, coating, and formation would directly ease the capital burden on this expansion. This comes at a time when the company is still ramping up commercial-scale output.
Amara Raja Energy & Mobility is building its own giga-corridor for lithium-ion cell manufacturing in Andhra Pradesh, alongside its traditional lead-acid battery business. The expanded duty relief on the full 85-category machinery list works in its favour as it imports specialized equipment for slurry mixing, electrode winding, and cell assembly. Lower import costs on such capital equipment can meaningfully improve project economics for a plant still in its build-out phase. The company has positioned this as a core part of its long-term diversification strategy.
Electronics Manufacturing Services (EMS)
Dixon Technologies is India’s largest listed EMS player and has been expanding beyond mobile phone assembly into components and display-related manufacturing. The duty relief on eligible display inputs, such as backlight units and flexible printed circuit assemblies used in automotive, medical, and industrial applications, could lower input costs for these businesses.
Dixon has also been forming joint ventures to move up the value chain into component manufacturing, and lower machinery and input costs could support the economics of these capital-intensive segments.
Syrma SGS Technology operates across electronics sub-assemblies, including auto electronics and industrial products that use display components. As a diversified EMS player serving multiple sectors, it stands to benefit from cheaper display cell and backlight unit imports where its products fall under the automotive or industrial display categories. The company has been expanding its manufacturing footprint across segments. Lower input costs on such components could support its cost competitiveness in these lines.
Smartphone Components
Kaynes Technology is a diversified contract manufacturer that has been expanding into electronics sub-assemblies, including areas that touch wireless charging and coil-related components. The concessional duty on inputs like nano-crystalline assemblies, coils, and neodymium magnets can help lower costs for manufacturers supplying such parts to smartphone OEMs.
Kaynes has been scaling up its component manufacturing capabilities as part of its broader growth strategy. Reduced import costs on these niche inputs would support better margins as this segment grows.
Avalon Technologies is another contract manufacturer with a presence in electronics sub-assemblies for multiple industries, including consumer electronics. As the wireless charging module supply chain develops in India, companies like Avalon, involved in electronics sub-assemblies, could indirectly benefit from lower import costs on specialized inputs if they participate in these product categories.
The company has been diversifying its client base across sectors. Lower input costs here would be incremental rather than transformative, depending on how much of its revenue comes from this specific segment.
Battery Chemicals and Materials
Neogen Chemicals manufactures specialty chemicals, including electrolyte salts and other lithium-ion battery materials, and has tie-ups with global battery makers. While this CBIC notification concerns machinery rather than chemical inputs, an expanding battery manufacturing base supported by cheaper equipment purchases typically increases demand for electrolyte and other battery chemicals. The company has been building capacity specifically anticipating this demand growth. It stands as an indirect beneficiary of faster battery capacity addition in India.
Himadri Speciality Chemical
Himadri Speciality Chemical has been expanding its presence in the lithium-ion battery materials value chain through investments in advanced carbon materials and anode-grade products used in EV batteries. While the CBIC notification does not provide direct customs duty relief on battery chemicals or raw materials, lower capital costs for domestic cell manufacturers could accelerate capacity additions, creating higher long-term demand for battery materials. As India’s battery manufacturing ecosystem scales up, Himadri stands to benefit indirectly through increased demand for its specialized battery material offerings.
The Bigger Picture
None of this is a direct subsidy or a guarantee of order inflows. What it does is reduce the upfront capital cost of setting up or expanding manufacturing lines in three fairly capital-intensive segments: battery cells, specialized displays, and smartphone charging components. Companies already committed to capacity expansion in these areas are the ones best placed to benefit, since the relief applies to machinery purchases rather than finished goods.
As always, these are sectoral beneficiaries based on the policy direction, not investment recommendations. Anyone looking at these names should track company-specific capex plans, execution timelines, and how much of their business actually falls under the exempted categories before drawing conclusions.
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