Will Phones & EVs Get Cheaper in India? Tax Move Explained (July 2026)
Okay, real question — you saw the news that India waived customs duty on phone and EV components. Everyone’s headline is basically “big move for Made in India.” But here’s what most of us actually want to know: will my next phone or EV actually get cheaper because of this?
Honest answer coming up — and it’s more interesting than a simple yes or no. Let me break down what really happened yesterday, which products it affects, and what it actually means for anyone planning to buy a phone, laptop, or EV in the next year.
The Quick Version
On July 9, 2026, the Indian government waived basic customs duty (BCD) on components used to manufacture:
- 📱 Display assemblies — used in phones, laptops, TVs, and screens
- 🔋 Lithium-ion cells — used in phones, laptops, wearables, and EVs
- ⚡ Inductor coil modules — used in wireless charging and other electronics
The exemption removes duties of 7.5% and 5% that manufacturers used to pay. It’s valid until March 31, 2029. That’s a big time window — enough for real change to happen in Indian manufacturing.
Now here’s where it gets interesting: this isn’t just a tech story. It’s about how India is quietly trying to move from “assembling stuff” to “actually making the important parts.” Let me explain why that matters for your wallet.
What Actually Changed (Plain Language)
Right now, when a brand like Xiaomi or Samsung builds a phone in India, they don’t make everything here. They import many components — displays from China, batteries from South Korea, chips from Taiwan — assemble them in India, and sell you the finished phone. Even a “Made in India” phone has 60-70% foreign parts.
The government has been trying to change this for years through the Production Linked Incentive (PLI) scheme — basically paying manufacturers extra money if they build components locally. But there was one big problem: the machines needed to make those components were themselves being taxed at import. Like the government saying “please build a factory here” while charging you extra for the tools to build it.
Yesterday’s move fixes that. The Central Board of Indirect Taxes and Customs (CBIC) has now waived duties on 85 categories of machinery used for lithium-ion battery production alone. Add the display and inductor coil exemptions, and suddenly making phone/EV components in India got a lot cheaper for manufacturers.
Which Products Does This Affect?
Basically anything that has a screen or a battery, honestly:
- Smartphones: From Nothing Phone 4b to iPhone 17 Pro — every phone with a display and Li-ion battery benefits
- Laptops: Especially those manufactured or assembled in India (HP, Dell, Lenovo, Acer models)
- Electric Vehicles: Tata Nexon EV, Mahindra BE 6, Ola scooters, Ather 450 — all use Li-ion cells
- Smartwatches and wearables: Boat, Noise, Apple Watch, Samsung Galaxy Watch
- Smart TVs: Both Indian brands (Xiaomi India, TCL India assembly) and imported ones
- Wireless earbuds: Battery-powered accessories
- Medical devices: Ultrasound screens, monitoring equipment
The biggest winners named across analyst reports: Apple, Samsung, Xiaomi, Nothing, Motorola, Tata Electronics, Foxconn India, Ola Electric, Amara Raja, Reliance Industries, and battery gigafactories being built by companies like Exide.
Now the Real Question: Will Phones Actually Get Cheaper?
This is where I have to be honest with you. The answer is “yes, but not the way you’re hoping.”
Here’s the honest breakdown:
What WILL likely happen ✅
- Prices will stop rising as fast. Right now, memory chip prices are climbing globally due to AI demand — every phone brand from Apple to Xiaomi has been quietly raising prices. This customs duty relief offsets some of that pain.
- Some entry-level phones might drop ₹500-1,500. Especially budget models where a small margin cut matters more to manufacturers.
- Discounts and offers may become more generous. Brands may pass savings through festive sales rather than direct price cuts.
- Made-in-India phones become more competitive globally — which brings more manufacturing here long term.
What probably WON’T happen ❌
- iPhones won’t suddenly get cheaper by 10%. The customs duty was on manufacturing components, not on the finished product. Brands will absorb some savings, pass some through, keep the rest as margin.
- You won’t see immediate price cuts. Existing inventory was already imported at old duty rates. New pricing usually reflects 3-6 months later.
- Premium phones (above ₹50,000) won’t see much change. Component cost is a smaller share of premium phone prices — most of the cost is R&D, branding, and margins.
Real talk: any tech blogger telling you “iPhones will become 20% cheaper” is exaggerating. But anyone saying “nothing will change” is also wrong. The truth is in between — modest, gradual improvements starting late 2026 and picking up through 2027.
What About EVs?
Now THIS is where the news gets more exciting. Lithium-ion cells are typically 30-40% of an EV’s total cost. If manufacturers can make cells locally cheaper, the savings actually add up to meaningful money on a car.
Realistic EV impact:
- Ola scooters and Ather 450: Could see ₹5,000-15,000 price drops or better features at the same price by mid-2027
- Tata Punch EV, Nexon EV: Not immediate cuts, but future models will have better battery-to-price ratios
- New EV launches in 2027-28: This is where you’ll really feel the change. Indian-made EVs with Indian-made batteries could genuinely undercut import-heavy competition.
- Battery replacement costs: Currently ₹4-7 lakh for EV battery replacement — this could drop significantly by 2028
If you were on the fence about whether India’s EV push is real — this move is a big signal. The government just made it much cheaper to build EV batteries here, which is the single biggest cost blocker.
Speaking of EVs, if you’re actively shopping, check out our full guide on the 8 best electric cars under ₹20 lakh in India — most of the picks there will benefit from this policy over the next 12-18 months.
The Global Context (Why Timing Matters)
Here’s what most Indian coverage is missing — the timing of this move is not random. Right now:
- Memory chip prices are globally rising — AI demand is eating up supply. Phone makers are quietly raising prices.
- China+1 strategy is real — global brands (especially Apple) want to reduce dependence on Chinese manufacturing. India has been the biggest beneficiary.
- Apple has already crossed a milestone — Tata Electronics reportedly overtook Foxconn on iPhone exports from India recently.
- Samsung is scaling up Indian production aggressively, especially for Galaxy S26 series
This customs duty move is India saying: “we’re not just going to assemble phones here, we’re going to make the important parts too.” That’s a much bigger deal than most headlines suggest.
What Should YOU Do?
Depends on when you’re planning to buy:
Buying a phone in the next 1-3 months? Don’t wait for this policy to bring prices down — it won’t be that fast. Buy what fits your budget now. If you’re looking under ₹20,000, our best phones under ₹20,000 guide is still valid.
Buying in 6-12 months? You might see slightly better value — either lower prices or better specs at the same price. Especially watch mid-range phones (₹15,000-40,000 segment) — that’s where this will hit hardest.
Buying an EV soon? The immediate impact is limited. But if you can wait 6-12 months, new EV launches in 2027 will likely offer better battery ranges at the same price, thanks to cheaper local battery production.
Buying an EV battery replacement? Consider waiting if it’s not urgent. Prices should ease by 2027-28 as local production ramps up.
Who’s Reacting to This
Some quick industry reactions:
- Pankaj Mohindroo, Chairman of ICEA (India Cellular and Electronics Association): called it a “masterstroke” for making Indian display manufacturing hyper-competitive globally.
- Battery stocks jumped — Amara Raja Energy, HBL Engineering, and Reliance Industries all saw upward movement on the news.
- Manufacturers welcomed it quietly. Most industry insiders had been asking for this for over a year.
- Consumer electronics analysts project 5-8% cost reduction in Indian manufacturing over the next 18 months.
The Bigger Picture
Honestly, this is one of those moves where the immediate consumer impact is small but the long-term shift is huge. India is quietly building the ecosystem to actually make phones and EVs from scratch — not just assemble them.
Ten years ago, “Made in India” phones were basically Chinese phones with an Indian sticker. Today, it’s mixed. Ten years from now — thanks to policies like this one — India could genuinely be a top-3 global manufacturer of phones, EVs, and batteries.
For consumers like us, that shows up in three ways over time:
- More competitive pricing (Indian brands can match global brands more easily)
- Better product availability (fewer supply chain issues)
- Faster launches in India (products don’t have to wait for import clearances)
Bottom Line
India waiving customs duty on phone and EV components is real news that will genuinely affect prices — but slowly. Don’t expect Flipkart deals to suddenly get 20% cheaper next week. Do expect gradually better value in phones from late 2026 onwards, and meaningful EV price improvements from 2027-28.
If you’re a phone or EV shopper, my honest advice: buy what makes sense for your needs today. The policy shift is real, but it’s the kind of change that shows up in your next-next phone, not your next one.
Are you waiting for prices to drop before buying a new phone or EV? Or buying anyway? Drop a comment — genuinely curious how this news is affecting your buying plans.
For more on how to actually buy smart in India, check our guides: best phones under ₹20,000, best EVs under ₹20 lakh, and if you want to earn some money to fund those purchases, 10 real ways to make money with AI in 2026.
Disclaimer: This article is based on notifications from the Ministry of Finance and CBIC issued on July 9, 2026, and reporting from Business Standard, Republic World, Gizbot, and The Week. Price estimates and market projections are based on analyst commentary and are not guaranteed. Manufacturer pricing decisions depend on multiple factors including component sourcing, currency exchange rates, and market conditions. Always verify current pricing before purchase.
