Finance Minister Nirmala Sitharaman has rolled out new measures aimed at enhancing India’s electronics manufacturing. These initiatives include raising the basic customs duty (BCD) on flat panel displays, launching a center of excellence for artificial intelligence in education, and establishing a ₹20,000-crore fund for deep-tech startups.
Changes in Display Manufacturing Taxes
The recent budget adjustments impact interactive flat panel displays and display open cells. The BCD on flat panel displays is now set at 20%. This aligns with the ‘Make in India’ initiative and aims to correct the current duty structure.
Open cells, which are crucial for making LED TVs but are not locally produced, are now free from import duties. Jasbir Singh Gujral from Syrma SGS remarked that this exemption is vital for boosting self-reliance in battery and electronics manufacturing.
However, Avneet Singh Marwah from Super Plastronics Pvt Ltd expressed concerns that these duty changes mainly benefit a select few brands from China. With only one operational open cell manufacturer in India, the focus on imports might hinder local competition.
For flat panel displays, a 5% import duty remains, which adds extra costs for local producers. This has led to mixed reactions in the stock market, with some companies like Dixon Technologies seeing declines.
Deep-Tech Fund of ₹20,000 Crore
To bolster deep-tech startups, the government announced a ₹20,000-crore fund of funds. This move aims to address the funding challenges faced by these startups that often require significant investment for long-term innovation.
Currently, many venture capital firms focus on early-stage startups, leaving a gap for deeper tech investments. Vishesh Rajaram highlighted that this fund could significantly enhance India’s capacity for groundbreaking technologies and support startups incubated at IITs.
AI Skills Development
A new center of excellence in Artificial Intelligence for education is set to receive ₹500 crore. This initiative aims to bridge the skills gap in AI, helping India become a leader in this vital field.
Experts like Mahesh Makhija from EY India view this as a crucial step. Collaborations between educational institutions and industries are expected to produce AI solutions that can transform education.
Nevertheless, some analysts, including Gartner’s DD Mishra, feel the measures don’t go far enough to fully leverage AI’s potential in India. They call for more substantial investments in AI infrastructure.
Battery Production Initiatives
Sitharaman also exempted 28 capital goods from BCD to promote local manufacturing of lithium-ion batteries for mobile phones and electric vehicles. This move aims to support the manufacturing ecosystem, which is still developing in India.
The industry has frequently urged the government to attract more supply chain partners for better localization of component production.
Boosting Industry 4.0
The government plans to establish a framework for developing global capability centers in tier-II cities to enhance Industry 4.0 efforts. This aims to help integrate India more deeply into global supply chains.
As stated by Sitharaman, there is great potential for job creation in high-skill sectors, and the government is keen to support this growth.
Improving Rural Connectivity
Lastly, Sitharaman announced plans to improve broadband connectivity in rural areas as part of the BharatNet project. This initiative aims to provide internet access to all government secondary schools and primary health centers in these underserved regions.
In light of these announcements, Bharti Airtel saw a slight drop in share prices, while telecom infrastructure maker HFCL had a notable rise.
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Budget 2025,Technology,Artificial intelligence,TVs,Phones,Deeptech startups,GCCs,Telecom,Nirmala Sitharaman
