In an effort to boost electronic manufacturing in India, the Central Government has extended customs duty exemptions to several critical components used in the production of lithium-ion batteries, display assemblies, and inductor coil modules. The duty waiver is expected to reduce import dependence and encourage domestic manufacturing. It is also likely to significantly lower production costs for electronic devices such as smartphones, laptops, and televisions.
Some of the parts covered under the duty exemption include nano-crystalline assemblies, E-shiels, PET liners, PC shims, coils and neodymium iron boron (NdFeB) magnets. The Central Board of Indirect Taxes and Customs has also provided technical definitions for the exempted components to ensure consistency is maintained.
In the case of lithium-ion batteries, around 85 per cent of components used in the manufacturing of the cells are now exempted from taxes. Along with the growing electric vehicle (EV) market, lithium-ion cell manufacturing companies and upstream suppliers have already witnessed a rise in share prices.
Among the strong buys in the battery manufacturing sector is Amara Raja Energy and Mobility, which is witnessing a gain of around 2 per cent and is currently trading at around ₹850. HBL Engineering Limited is also gaining, valued at around ₹750, despite being slightly volatile. Reliance Industries Limited, fueled by its listing as one of the beneficiaries in the government's Advanced Chemistry Cell (ACC) Production Linked Initiative (PIL), is also trading well.
Among upstream suppliers, Minda Corporation, which manufactures EV-specific Battery Management Systems (BMS), is trading at about ₹700 and has seen a gain of over 3 per cent. Himadri Speciality Chemical Limited is also witnessing an increase of one per cent with similar share prices around ₹650.
Large market cap leaders like Exide and Tata Chemicals Ltd, though, are not witnessing a sudden upheaval and are predicted to increase gradually.
The duty relief will take effect immediately and will remain till March 31, 2029.
