The Centre has extended customs duty concessions on a range of machinery and components used in electronics manufacturing until March 31, 2029, creating significant opportunities for domestic battery manufacturers. According to Business Standard, this policy change is expected to reduce the cost of importing key raw materials and components, thereby lowering input costs for domestic battery manufacturers. The benefits, which come into effect immediately, cover machinery for lithium-ion battery manufacturing, display assembly components for automotive and medical applications, wireless charging components for mobile phones, and other specified electronics manufacturing inputs. The move directly supports India's efforts to build a local battery manufacturing ecosystem and strengthen domestic electronics manufacturing capabilities.
Electronic manufacturing services (EMS) companies rallied up to 7.5% on Thursday after the Centre expanded customs duty concessions on electronics manufacturing machinery. As per The Economic Times, Kaynes Technology surged 7.5% to ₹1,446 apiece, while PG Electroplast, Dixon Technologies, Syrma SGS Technology, and Amber Enterprises also rallied by up to 6%. The Nifty 50 and Nifty 500 indices ended 0.3% and 0.8% higher, respectively, highlighting the sector-specific rally in EMS stocks. According to latest reports, Amber Enterprises shares rose 3.4% to hit an intraday high of ₹7,679.50, while Kaynes Technology gained 4.2% to its day's high of ₹3,347 per share. Syrma SGS Technology also advanced 5.3% during the session, with Avalon Technologies surging 8% to its intraday high, Centum Electronics climbing 3%, and Cyient DLM rising 5.16%. Manish Valecha, co-head of research at Anand Rathi Institutional Equities, noted that the relief covers machinery for lithium-ion battery manufacturing, display assembly components for automotive and medical applications, wireless charging modules for mobile phones, and other specified electronics manufacturing inputs.
The Central Board of Indirect Taxes and Customs (CBIC) has substantially expanded the list of machinery eligible for concessional customs duty for lithium-ion battery manufacturing, as reported by Moneycontrol. The revised list now covers 85 types of equipment spanning the entire manufacturing process, including material mixing, coating, pressing, slitting, winding, stacking, electrolyte filling, welding, testing, ageing, inspection and packaging. Supporting systems such as solvent recovery, heat recovery, dust collection and effluent treatment are also covered. Additionally, the government has extended customs duty concessions to five key components used in display assembly manufacturing for automotive, medical and industrial applications, while granting concessional customs duty on six components used in wireless charging inductor coil modules for mobile phones. The finance ministry issued three separate notifications giving effect to the basic customs duty (BCD) waiver on goods used in manufacture of display assemblies, lithium-ion cells and inductor coil modules. The exemption covers display cells, backlight units, flexible printed circuit assemblies (FPCAs), frames, and anisotropic conductive film (ACF), which are essential for producing display assemblies. However, the exemption does not apply to display assemblies meant for mobile phones, televisions, smartwatches, smart meters or interactive flat-panel displays.
India's Electronics Manufacturing Services sector has grown from $10 billion to $40 billion in just five years, as reported by The Economic Times. According to Harshit Kapadia, Vice President at Elara Securities, the structural story is far from over. "This is going to run for decades from now," Kapadia told ET Now, pointing to a powerful combination of global supply chain diversification, India's manufacturing cost advantage, and the government's renewed policy push, including a fresh outlay of ₹40,000 crore for the EMS sector. The decision is expected to lower the cost of importing specialised machinery and components that are not widely produced in India, while also aimed at encouraging fresh investments in battery cell manufacturing, automotive electronics and advanced electronics assembly. The measure could improve project viability, support future capacity additions and strengthen the domestic electronics manufacturing ecosystem over the longer term.
Dixon Technologies faces near-term challenges with March 2026 quarter revenue remaining flat due to geopolitical concerns and softer consumer demand, as reported by Business Standard. However, the company continues to strengthen customer partnerships and expand capacities across segments while accelerating backward integration and localization strategy. Analysts at JM Financial Institutional Securities upgraded Dixon to BUY from ADD with a target price of ₹14,200, citing rising smartphone average selling prices and the company's progress toward achieving its 33 million ex-Vivo smartphone volume guidance for FY27E. The Vivo joint venture is expected to start contributing by end-Q2FY27E, with the company targeting 63-65 million units for FY28E and 68-72 million units for FY29E. Mahesh Ojha, vice-president at Kantilal Chhaganlal Securities, identified Syrma SGS and Dixon as the strongest picks in the EMS space, followed by PG Electroplast and Kaynes Technology. He remains particularly bullish on Syrma SGS as the stock's fundamentals are strong with room for upside, while any healthy correction can be seen as an opportunity to add.
"The Government's decision to grant BCD exemptions on key inputs used in the manufacture of display assemblies, wireless charging modules and lithium-ion cells is another significant step towards strengthening India's electronics manufacturing ecosystem," said Manoj Mishra, partner and tax controversy management leader at Grant Thornton Bharat, as reported by Business Standard. "By reducing the import cost of critical components and capital goods, these measures are expected to improve cost competitiveness, encourage greater domestic value addition, and support the localisation of high-value manufacturing in smartphones and other electronic products. The expanded list of exempted capital goods for lithium-ion cell manufacturing is also likely to accelerate investments in domestic battery manufacturing." Manish Valecha from Anand Rathi Institutional Equities noted that while the immediate financial benefit is modest - primarily through lower capex and machinery procurement costs - the move reinforces the government's long-term commitment to strengthening the domestic electronics manufacturing ecosystem under the broader PLI framework and increases the likelihood of further policy support over time. The notifications, issued on July 8, 2026, aim to boost domestic manufacturing and value addition while supporting India's electronics and electric mobility sectors.
