Budget 2024 Expectations: Increase In Customs Duty (If Any) To Benefit EMS Companies: ICICI Securities

ICICI Securities Report

After speaking with white goods and durable companies and channel partners, we note July 2024 Budget expectations include:

1. Any increase in customs duty to benefit EMS companies as manufacturing in India will become relatively affordable,

2. extension to PLI schemes may result in higher investments in manufacturing activities. PLI benefits for most electronics items are likely to expire by FY28.

3. Indirect tax cuts will likely help in balancing the increase in costs due to implementation of BEE norms. It may drive growth of premium electronic items and could also result in energy savings.

4. Sops to drive growth of realty sector and infrastructure projects. It could push additional demand for electricals. B2B sales are 20-30% of revenue for most companies.

5. While Indian companies have developed capabilities to manufacture electronic products in India, global market is still dominated by Chinese players, who benefit from higher scale and operating leverage. Export incentives could result in higher growth of electronic manufacturing in India.

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