India Gains Edge in Electronics Exports to US
India’s electronics exports, including smartphones and laptops, are set to become significantly more competitive in the US market following the recent removal of tariffs by the Trump administration. This decision, announced over the weekend, is expected to lower prices by 20% compared to similar products from China, providing a substantial boost to India’s burgeoning electronics manufacturing sector.
Tariff Exemptions Favor India and Vietnam
The US has exempted a range of consumer electronics, including smartphones, tablets, laptops, and certain semiconductor components, from reciprocal tariffs that were previously imposed on countries like China, India, and Vietnam. This exemption grants India and Vietnam a crucial tariff advantage over China, which still faces a 20% tariff on many of its electronics exports. Pankaj Mohindroo, chairman of the India Cellular and Electronics Association (ICEA), emphasized that India now enjoys zero tariffs on iPhones and all smartphones, laptops, and tablets exported to the US. This positions India and Vietnam similarly in terms of tariff advantages, both benefiting from a 20% edge over China.
Mohindroo noted that this exemption comes as a relief to the industry, which had been concerned about potential disruptions in exports. He stated, “Now there will be no extraordinary disruption,” highlighting the positive impact of this decision on the electronics sector.
India’s Growing Role in Global Electronics Manufacturing
India has rapidly established itself as a key player in the global electronics manufacturing landscape. According to Union Minister Ashwini Vaishnaw, iPhone exports from India alone are projected to reach ₹1.5 lakh crore in the fiscal year 2024-25. Overall mobile phone exports have surpassed ₹2 lakh crore this year, marking a remarkable 55% increase from the previous fiscal year.
Industry experts believe that the recent tariff exemption will further solidify India’s position in the global electronics supply chain, especially amid ongoing US-China trade tensions. Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), described the exemption as a significant, albeit potentially short-lived, relief for global tech manufacturers. He emphasized that while the immediate export landscape may be challenging, the long-term prospects for India remain strong.
Opportunities for Growth Amidst Global Challenges
With US electronics imports exceeding $250 billion, of which 30% still originate from China, India has substantial opportunities to expand its current $12 billion electronics export base. Chandak urged Indian businesses to seize this moment to enhance operations and refine strategies to strengthen their foothold in global electronics value chains. He stated, “For Indian businesses, this is a vital window to scale up operations, reorient strategies, and strengthen their position in global electronics value chains.”
Faisal Kawoosa, chief analyst and co-founder of Techarc, remarked that the tariff exemption allows brands like Apple to continue operations in India without disruption, fostering growth in the sector. This move is seen as a way to reduce friction in the interconnected global electronics supply chain, according to Prabhu Ram, vice-president at CyberMedia Research.
Neil Shah from Counterpoint Research cautioned that while the return of smartphone manufacturing, particularly iPhones, is a long-term goal, the US government must adopt a strategic, multi-year incentive plan to achieve this objective.
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