How Trump's tariffs on China could boost India's electronics sector
What's the story
India's electronics industry is poised for a major growth spurt, all thanks to US President Donald Trump's decision to impose a 10% tariff on Chinese imports.
The new policy, which extends to previously exempt categories like smartphones, laptops, and other electronic products, will particularly benefit companies like Apple and Motorola using India as an export hub, experts predict.
Trade strategy
Call for robust India-US trade agreement amid new tariffs
In light of these new tariffs, industry leaders are pushing for a comprehensive trade agreement between India and the US.
Sunil Vachani, chairman of Dixon Technologies, stressed on a long-term strategy rather than short-term solutions.
He told Moneycontrol, that "although the tariffs seem to be a short-term solution, what's really needed is a more long-term strategy such as a broader trade agreement between India and the US."
Competitive edge
Advantage in labor-intensive industries
Vachani also emphasized India's unique position in the global market, especially in labor-intensive industries where it has achieved scale.
He said that "the relationship between the two countries is likely to remain positive, and sectors where India has already achieved significant scale and higher value-added industries, especially those that are labor-intensive, will benefit the most."
This gives India a unique edge over others.
Market shift
India's electronics sector sees opportunity in US tariffs
Pankaj Mohindroo, the chairman of the Indian Cellular and Electronics Association (ICEA), sees the US tariffs against Chinese electronics goods as a golden opportunity for India.
He called for quick action from policymakers and industry leaders to capitalize on this opportunity.
Vachani agreed with these sentiments, adding that companies that were previously based in Mexico might now look at India as an alternative because of this.
Export boost
Companies may increase exports
The new tariffs are likely to push more companies to source products such as smartphones, televisions, laptops, servers, and lighting from Indian factories.
Industry insiders expect that companies like Apple and Motorola will ramp up their exports from India via EMS players like Tata Electronics, Foxconn and Dixon.
This transition could further solidify India's place in the global electronics manufacturing arena.
Production shift
Apple plans to produce 25% of iPhones in India
In 2024, India's mobile phone exports hit a record $20.4 billion, primarily driven by robust overseas shipments from Apple and Samsung.
Apple is now looking to manufacture a quarter of its iPhones in India in the next two to three years.
The move is part of a larger strategy to build a local vendor network and reduce reliance on Chinese suppliers.