Uncertainty over reciprocal tariffs imposed by the United States has raised concerns among electronics manufacturers in India. Industry experts suggest that these tariffs could impact exports and influence manufacturing decisions for companies producing goods such as consumer electronics and telecom equipment.
According to industry representatives, the US remains a key export destination for India’s electronics sector. Some manufacturers are evaluating the potential implications of these tariffs on production and supply chains.
Impact on Electronics Manufacturing
Data from the India Cellular & Electronics Association (ICEA) indicates that India’s total electronics imports stood at $89.7 billion in FY23-24. Imports of integrated circuits (ICs) from the US increased from $105.46 million in 2023-24 to $505.21 million between April and November 2024-25.
Smartphones have become India’s top export to the US, largely due to the government’s production-linked incentive (PLI) scheme. The scheme has contributed to India’s emergence as a significant manufacturing hub for mobile phones.
Potential Industry Adjustments
Industry stakeholders note that companies such as Dixon, Foxconn, Pegatron, and Tata Electronics, which have invested in manufacturing in India, may assess their long-term plans based on tariff changes. Analysts suggest that if the new tariff structure makes exports less competitive compared to other manufacturing hubs like Vietnam or Taiwan, it could influence future investment decisions.
The ICEA has expressed optimism about resolving trade concerns through a Bilateral Trade Agreement (BTA). Chairman Pankaj Mohindroo recently stated that India already provides similar tariff exemptions to countries under Free Trade Agreements (FTAs) with Japan, Korea, and ASEAN nations, including Vietnam, Thailand, and Indonesia.
Growth Projections for Electronics Exports
Industry estimates place India’s electronics exports to the US at approximately $10 billion, with smartphones accounting for 62% of these exports in the current fiscal year. Some projections indicate that India’s electronics exports to the US could grow to $80 billion by 2030.
While smartphone and laptop exports currently face no tariff-related challenges, concerns remain regarding consumer electronics such as refrigerators, air conditioners, and telecom equipment.
Shifts in Global Supply Chains
Since the US introduced tariffs on Chinese goods in 2018, global supply chains have undergone restructuring. Some Chinese manufacturers have relocated production to countries like Vietnam, Taiwan, and Mexico while maintaining supply chain links to China. India is seen as an alternative that could not only shift assembly operations geographically but also offer diversification in supply chain ownership.
Industry participants continue to monitor developments and assess their impact on India’s electronics manufacturing sector.
Discover in-depth supply chain report news insights at The Supply Chain Report. For international trade tools, see ADAMftd.com.
#ReciprocalTariffs #USTradePolicy #IndiaElectronics #ManufacturingImpact #GlobalTrade #SupplyChainDisruptions #TradeTensions
