MAIT seeks import duty cuts on critical electronic components, tax sops in Budget 2026

New Delhi, Jan 18 (PTI) IT industry body MAIT has urged the government to reduce the basic customs duty on key electronic components and enhance tax incentives in the upcoming Union Budget to bolster domestic manufacturing and global competitiveness.

In its pre-budget recommendations submitted to the Finance and IT ministries, the Manufacturers' Association for Information Technology (MAIT) proposed lowering basic customs duty (BCD) on critical sub-assemblies, including camera modules, display assemblies, and connectors, from the current 10 per cent to 5 per cent to lower input costs and enhance competitiveness.

"In the backdrop of a complex and evolving global geopolitical landscape, coupled with significant trade and tariff uncertainties, this upcoming Union Budget assumes a role of paramount strategic importance for India. Disruptions in global supply chains, geopolitical tensions, and the weaponisation of trade policies have highlighted the vulnerabilities inherent in over-reliance on imports.

"We require strategic interventions in ICT adoption, AI integration, market access, enhanced credit guarantee coverage for micro and small enterprises, startups, and export-focused MSMEs, among other measures. To bolster domestic manufacturing, it is imperative to rationalise import duties on components not currently manufactured in India," MAIT said.

The industry body recommended continued incentivisation for domestic mobile manufacturing as the production-linked incentive (PLI) scheme for mobile manufacturing is set to conclude on March 31, 2026.

India has assumed a leadership position in mobile manufacturing, and it is important to build on the capacity created in the country, not only for domestic consumption but also for exports, it said.

Furthermore, to support the indigenous manufacturing of electronic components, MAIT has recommended reducing all duties on parts and inputs for inductor coils to zero.

It also sought a reduction in import tariffs on audio components, such as microphones, receivers, and speakers, from the current 15 per cent to 10 per cent to encourage domestic value addition.

To position India as a global repair hub, the association has called for an extension of the limitation period for "import of goods for repair and return" from the current 7 years to 20 years, aligning it with the expected life span of electronic equipment and global practices.

On the direct tax front, MAIT has proposed to "increase the lower cap of salary from Rs 25,000 to Rs 50,000 for computing deductions under Section 80JJAA (for new employment generation)".

This, it said, will account for wage inflation and encourage formal job creation.

"In the backdrop of a complex and evolving global geopolitical landscape, coupled with significant trade and tariff uncertainties, this upcoming Union Budget assumes a role of paramount strategic importance for India. It is not merely an annual financial statement but a critical policy instrument to fortify our nation's economic sovereignty and resilience.

"This Budget presents a historic opportunity to send an unequivocal signal to the world and to Indian industry: India is building a deep, competitive, and resilient manufacturing base that is integrated with the global economy on its own terms," MAIT said. PTI ANK ANK BAL BAL