India's Electronics Industry Poised for Growth Amid US Tariffs on China
India's electronics industry is now poised for short-term growth as US President Donald Trump has announced a 10 percent tariff on Chinese imports, according to industry experts. Extending tariffs to categories previously exempt, such as smartphones, laptops, and other electronic products, this move can help India become a strong manufacturing hub in the world. Experts have stressed that this is a time for nimble policymaking and broader trade agreements with the United States to make the most of this opportunity.
The new 10 percent levy, as opposed to the 25 percent tariff on goods from Canada and Mexico, will help companies such as Apple and Chinese brands such as Motorola that use India as an export hub. Industry leaders pointed out that the tariff would give a short-term advantage, but a long-term strategy in the form of a more comprehensive trade agreement between India and the US is what is needed. Sunil Vachani, chairman of Dixon Technologies, pointed out that India's relationship with the US will remain strong in areas where India has gained significant scale. These sectors which encompass labor intensive, are estimated to benefit at large from new tariffs, this places India distinct in comparison with the rest.
Dixon Technology, a foremost contract manufacturer holds over 24 units of manufacturers within India including amongst its consumers; Apple and Samsung, Bosche. This said, even the chairman Indian Cellular and Electronic Association, Mr Pankaj Mohindroo concurs, "these are huge opportunity that US had introduced on electronic and Chinese apparels". However, he insisted that both the policymakers and the industry must move fast to capitalize on this moment. India needs to position itself as the most competitive nation by ensuring predictability in policy and creating the best environment for business.
Vachani noted that a majority of the firms are using Mexico as their hub, thus an opportunity is lying in India. However, at both the industrial and governmental level, this scope needs improvement at the infrastructural and approval stages. Some products like mobile, television, laptop, server, and light sources are going to be favored through this practice when more and more companies come with the intention to source products from Indian factories.
Another opportunity of this scenario is the growth of exports of India. The Apple and Motorola, among other brands, would look to enhance exports from India through EMS players such as Tata Electronics, Foxconn, and Dixon. It will further reinforce the position of India in the electronics manufacturing scenario globally. India's exports of mobile handsets have had an impressive trajectory. The last year has indeed seen the business hit a milestone $20.4 billion; here, however, Apple remains the market leader, accounting for 65 per cent of its exports, Samsung follows with a share of 20 per cent, and local companies account for the remaining 15 per cent, which constitutes re-exports of handsets.
Apple produces $17.5 billion iPhones in India that had $12.8 billion exports in the year 2024. Samsung, for instance, committed close to $4bn. The technology firm has targeted generating a quarter of its iPhones in India in two to three years while developing a local vendor ecosystem and mitigating dependence on the Chinese supply chain. Vachani noted that the IT hardware space, which houses laptops, tablets, and services, had only started out but would enjoy an even wider ramp-up. Several Taiwanese companies are already looking to make India their global manufacturing base, designing products locally and deepening backward integration.
Experts also noted that India’s mature electronics assembly process and high manufacturing capacity put the country in an advantageous position. Tarun Pathak, research director at Counterpoint, said that the first round of tariffs did not have India in it initially, but the new move will give the country a chance to become an alternate supplier, especially in the electronics sector, as India's assembly process is already well-established. Apple and its suppliers, such as Tata Electronics, Foxconn, and Dixon-Motorola, are likely to benefit from this as they already export from India to the US.
Faisal Kawoosa, an analyst and founder of TechArc, said that the US tariffs on China and Mexico could prove beneficial for India’s mobile and electronics ecosystem. Chinese smartphone brands, which already have a strong presence in India, are expected to route more exports from India to the US to avoid the 10 percent tariff. This shift could result in more manufacturing collaborations and further increase exports from India.
In her Budget 2025 speech on 1 February, Finance Minister Nirmala Sitharaman cancelled import duties for key components going into the mobile phone, mainly printed circuit board assemblies, part of camera modules, and USB cables. In doing so, she is believed to have addressed the ambiguity for manufacturing competitiveness as well as ensured local production and value addition, which will get a boost for the same reason. Pankaj Mohindroo of ICEA said that while tariff protection was necessary in the early years of manufacturing, the industry has now reached an annual production scale of $60 billion, making the removal of these tariffs essential for continued growth and competitiveness.
Experts believe that an active approach on the part of the government as well as industry will be essential to take proper advantage of the new tariff regime, which will be a starting point for India to capitalize upon. With such policies, India could not only meet the current demands of the global electronics market but also hold a position there for years ahead.
