NEW DELHI: The government has proposed to increase import duty on motherboards, technically called printed circuit boards, by 5 per cent in the Union Budget 2024-25 to boost domestic telecom gear manufacturing.

"To incentivise domestic manufacturing, I propose to increase the BCD (Basic Customs Duty) from 10 to 15 per cent on PCBA (printed circuit board assembly) of specified telecom equipment," Finance Minister Nirmala Sitharaman said.

The increase in basic customs duty for telecom PCB assembly comes with the exemption of critical minerals that are used in the manufacturing of communication equipment.

The finance minister proposed to fully exempt 25 minerals, such as lithium, copper, cobalt and rare earth elements, which are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics from customs duties and reduce basic customs duty on two of them.

"This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors," Sitharaman said.