Budget 2026 signals long-term shifts in the pricing of electronic gadgets. The policies seek to reduce costs for locally assembled products while raising the prices of certain imported finished goods. It also outlines major revisions to customs tariffs to promote domestic electronics manufacturing.
These moves are set to directly reshape consumer prices in different sectors.
Finance Minister Nirmala Sitharaman presented the Budget 2026 at the Lok Sabha on Sunday, February 1. At first glance, the recent fiscal changes seem to signal relief for consumers, but the reality is more nuanced.
Minister Sitharaman proposed a Rs. 40,000 crore allocation for electronics manufacturing under the PLI scheme for the 2026-27 financial year. She also announced the development of high-tech tool rooms at two locations to promote capital goods manufacturing and strengthen the electronics ecosystem as a whole.
The suggested changes in Budget 2026 could help manufacturers spend less on making electronics and related products, eventually leading to lower prices for some devices. However, these drops will not happen right away and are also not guaranteed yet.
The Finance Minister told Lok Sabha members that the changes are meant to help local manufacturing. By reducing reliance on imports through changes to customs duties, she focused on materials used to make lithium-ion cells and microwave oven parts.
Nirmala Sitharaman explained, “To provide further impetus to green mobility and energy security, we have extended the basic customs duty exemption on capital goods for manufacturing lithium-ion cells to include those used for battery energy storage systems,” while adding, “These steps, alongside the launch of India Semiconductor Mission 2.0, will support jobs, innovation, and help build a resilient domestic supply chain, making our industries more globally competitive.”
Market analysts expect that full exemptions from customs duties on materials used in batteries and certain electronics components will reduce costs for smartphone and other device manufacturers. Previously, duties on many inputs raised production costs, which contributed to higher prices for finished goods.
Under the new budget rules, key machines and materials for battery production and the processing of critical minerals can be imported at lower tariffs, reducing a major cost. Experts say these lower costs do not immediately translate into a sharp price cut of smartphones in the coming weeks; it will instead depend on how domestic makers and importers adjust their pricing.
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Since the beginning of Narendra Modi's tenure as Prime Minister, India's smartphone imports have stood at around 75 per cent. Now, it has reduced to just 0.02 per cent. Domestic manufacturing has grown from 5.8 crore units to 33 crore units to cater to both local and international markets. These exports have also increased over 100 times, reaching Rs 2 lakh crore in 2024-25.
The budget reflects the government’s initiatives under Make in India, ISM 2.0, and expanded PLI schemes, where the continuity of input costs is considered as important as headline tax cuts. The government is providing manufacturers with greater predictability in investment decisions, which will lead to stronger supply chains over the long term and allow more competitive pricing.