Budget impact: Smartphones and EVs to get cheaper; TVs, fabrics to get costlier

Union Finance Minister Nirmala Sitharaman, presenting the Budget 2025-26 on Saturday, introduced some key changes in basic customs duties (BCDs) that will impact the prices of various goods.

The budget includes duty exemptions on essential medicines, electronic goods, electric vehicle (EV) components, and mobile phone parts. The changes introduced will make them more affordable for consumers.

One of the biggest reliefs comes in the healthcare sector, where the government has fully exempted 36 life-saving drugs used in the treatment of cancer and chronic diseases from basic customs duties.

Additionally, 37 more medicines will also be duty-free to make essential medical treatment more affordable for patients.

Electronics and technology products are also set to get cheaper. The government has reduced the basic customs duty on open cells and other components used in electronic goods.

Mobile phones will also see price reductions, as 28 additional goods used in mobile phone batteries have been exempted from duty.

Similarly, headphones, wired headsets, microphones, and USB cables will benefit from a customs duty exemption on raw materials used in their production.

The EV sector received a major boost with customs duty exemptions on 35 additional goods used in EV battery manufacturing.

The government has also removed duties on cobalt powder, lithium-ion batteries, and 12 other critical minerals essential for making EVs, mobile phones, and other high-tech devices.

In the leather industry, the exemption of basic customs duty on wet blue leather is expected to lower costs for manufacturers. As a result, products like jackets, shoes, belts, and purses are set to become more affordable.

The shipbuilding sector will also benefit as the government extends duty exemptions on raw material components for another 10 years.

Marine products will see a price drop, as the customs duty on fish pasteurii has been reduced from 30 per cent to 5 per cent.

The fish hydrolysate, used in aquatic feed production, will now attract a lower duty of 5 per cent instead of 15 per cent.

The budget also aims to strengthen India’s handicraft exports by promoting global competitiveness.

In another step to support the domestic technology sector, the customs duty on carrier-grade Ethernet switches has been reduced from 20 per cent to 10 per cent.

However, some items will become more expensive. Knitted fabrics will now attract a higher customs duty of 20 per cent or Rs 115 per kg, whichever is higher.

The government has also raised the duty on flat-panel displays used in TVs from 10 per cent to 20 per cent, which is expected to increase television prices.

This move is intended to correct the inverted duty structure and encourage domestic production of TV components.

Additionally, motorcycles with an engine capacity not exceeding 1,600 cc will now attract a 40 per cent customs duty, down from the current 50 per cent.