Electronics Industry Flags Budget Gap: Inverted Duties Boost China Imports, Harm Local Manufacturing

• The electronics industry has highlighted inverted duty structures, where capital goods have 0% duty but parts face 5-20% duties, incentivizing imports over local manufacturing.
• This tariff anomaly creates strategic vulnerability for India, especially with China's recent restrictions on capital goods exports.
• The industry requests rationalization of duties on capital goods parts to 0% to support domestic machinery manufacturing.
• For automotive displays, a uniform 15% duty on both finished products and inputs discourages local production; the industry seeks 15% on finished displays and 0% on inputs.
• Inverted duties on inductor coils (10% on finished, 15% on inputs) also hinder domestic manufacturing, prompting calls for duty rationalization on parts.

Why It Matters: Inverted duties in electronics push imports from China, hindering India's domestic manufacturing and creating vulnerability.