EMS shares surge on govt move to waive customs duty on key components; Dixon Tech, Kaynes rise up to 5%

Shares of electronics manufacturing services (EMS) and lithium cell making firms were all trading with gains on Thursday, July 9, after the government said it has waived basic customs duty on key components for electronics manufacturing.

The duty has been exempted on goods used in the manufacture of display assemblies, lithium-ion cells and inductor coil modules as it looks to promote domestic production of electronic devices like smartphones, laptops, wearables and smart TVs.

Manufacturers of display assemblies used in automotive, medical, and industrial equipment are set to be among the key beneficiaries. The Centre has granted customs duty exemptions on critical imported components, including display cells, backlight units, flexible printed circuit assemblies (FPCAs), frames, and anisotropic conductive film (ACF), which are essential to produce these assemblies.

However, the exemption does not apply to display assemblies meant for mobile phones, televisions, smartwatches, smart meters or interactive flat-panel displays.

Furthermore, the government in the notification also said that it has extended customs duty concessions on units used in wireless charging modules for smartphones. These include NFC and inductor coil-related parts such as nano-crystalline assemblies, E-shields, PET liners, PC shims, coils and neodymium iron boron (NdFeB) magnets. 

The finance ministry issued three separate notifications giving effect to the basic customs duty (BCD) waiver on the goods used in the manufacture of the three key components used in electronic devices.

This exemption is in line with the government's efforts to promote domestic electronics manufacturing under the PLI scheme. The duty waiver would reduce import dependence and strengthen the electronics ecosystem with local production.

This exemption would be valid till March 31, 2029, the notifications said.

Share price trends

Shares of electronics component manufacturing firms like Dixon Tech, Kaynes Tech and more were trading higher on Thursday, showing a broad-based buying interest across electronics manufacturing services players.

Amber Enterprises shares rose 3.4% to hit an intraday high of ₹7,679.50 apiece, while Kaynes Technology India gained 4.2% to its day’s high of ₹3,347 per share. Syrma SGS Technology also advanced 5.3% during the session.

Among other stocks in the segment, Avalon Technologies surged 8% to its intraday high, Centum Electronics climbed 3%, and Cyient DLM rose 5.16%. Elin Electronics, meanwhile, added 2.6% at its intraday peak.