US-China Tariff Tussle Opens Tech Manufacturing Doors for India
In a dramatic reversal of fortune, U.S. President Donald Trump has cancelled any planned tariff exemptions on Chinese imports, reinstating a tough stance on trade with China. In a post on Truth Social, Trump explained that 'no one's off the hook', meaning that semiconductors, computers, and smartphones from China will only briefly be hit with a 20% tariff twice the standard rate while more general 145% tariffs on Chinese products are still on the table. The declaration paves the way for future National Security Tariff Investigations, which could come as early as next week.
The recent turn of events has created uncertainty about the long-term trajectory of U.S.-China trade relations. But the administration's message is unmistakable: a new thrust toward domestic manufacturing. U.S. Commerce Secretary Howard Lutnick highlighted the urgent necessity of making semiconductors, chips, and flat-panel displays domestically, affirming national security interests as the compelling narrative.
Though the changing position of the Trump administration clouds what the future holds for policy, the existing tariff regime presently provides some short-term reprieve for international tech behemoths, some of which have historically relied upon Chinese production. "Particularly Apple, which was in the middle as well as the wider chip and hardware sectors", said Prabhu Ram, director of the Industry Intelligence Group at CyberMedia Research. "Exclusion of smartphones and chips is especially important in the context of China tariffs. Although it resolves near-term issues, long-term uncertainty regarding US-China trade dynamics persists".
For India, this instability could mark a turning point. With its growing consumer market, increasing manufacturing capability, and favorable policy environment, India is well-positioned to take a greater share of global tech output. The momentum is also backed by a potential India-U.S. trade agreement, which has become more pressing in the wake of recent events.
The iPhone production shift from China to India will keep going and gain momentum despite the exemption, Sui, a cross-border technology analyst, stated. "India produced around 13%–14% of the world's iPhones in 2024, and we anticipate that doubling by this year.
The Indian government is working aggressively towards this shift. It made higher allocations under the Performance-Linked Incentive (PLI) Scheme for FY 2025–26 in March. The Electronics and IT Hardware segment received an allocation of Rs 5,777 crore that has been enhanced to Rs 9,000 crore, while Automobile and Auto Components sector support was enhanced from Rs 346.87 crore to Rs 2,818.85 crore.
Apple, in its manufacturers Foxconn, Pegatron, and Tata Electronics, has increased plans for expanding output in India. Industry estimates indicate that iPhone exports out of India may cross $15 billion in 2025, marking India's increasing reputation in the international electronics supply base.
