India set for electronics boost amid Trump's tariffs on Chinese imports
New Delhi, Feb 3, 2025
The US-China tariff conflict gives India's tech industry a boost as global brands like Apple and Motorola expand exports from India, capitalising on the US tariffs against China's electronics
India’s electronics sector is expected to see short-term benefits following the United States’ decision to impose a 10 per cent tariff on Chinese imports, according to a report by Moneycontrol. However, they emphasise the need for proactive policymaking and the establishment of comprehensive trade agreements with the US to sustain long-term growth.
The newly introduced levy, which is lower than the 25 per cent tariff imposed on Canadian and Mexican goods, now includes previously exempt product categories such as smartphones, laptops, and other electronic devices.
Boost for India’s export hub
The decision is expected to bolster global brands like Apple and Motorola, which utilise India as a key export base. Industry leaders highlight the importance of agile policy decisions to maximise this opportunity and reinforce India's position in global trade.
Moneycontrol quoted Sunil Vachani, chairman of Dixon Technologies, saying that while the tariff adjustments may offer immediate advantages, long-term strategies such as broader trade agreements between India and the US are crucial. He said India’s strong position in labour-intensive, high-value manufacturing gives it a competitive edge over other nations.
Dixon Technologies, a leading contract manufacturer with multiple facilities across India, serves major clients including Samsung, Xiaomi, Motorola, Realme, Google, Vivo, and Transsion Group. Meanwhile, Apple sources its iPhones from Foxconn and Tata Electronics, following the latter’s acquisition of Wistron and Pegatron facilities in India.
Expanding India’s role in electronics manufacturing
With some global firms already leveraging Mexico as a manufacturing hub, India has the potential to emerge as a strong alternative, according to Vachani of Dixon Technologies. He stressed the need for improved infrastructure and streamlined regulatory approvals to convert this opportunity into tangible business growth.
Product categories such as smartphones, televisions, laptops, servers, and lighting are expected to benefit as more companies explore sourcing from Indian manufacturing facilities.
Apple’s export growth from India
Industry analysts predict that brands like Apple and Motorola will continue ramping up exports from India through electronics manufacturing service (EMS) providers such as Tata Electronics, Foxconn, and Dixon Technologies.
India’s mobile phone exports reached a record $20.4 billion in 2024, with Apple leading the market at 65 per cent of total exports, followed by Samsung at 20 per cent. Indian firms contributed the remaining 15 per cent, which included re-exports.
Apple produced iPhones worth $17.5 billion in India last year, with exports totaling $12.8 billion, while Samsung contributed approximately $4 billion. Looking ahead, Apple plans to manufacture at least a quarter of its iPhones in India within the next two to three years as it strengthens its local supply chain and reduces dependency on China.
To support its expansion, Apple has already partnered with over 40 Indian companies, including leading electronics manufacturers like Dixon Technologies, Amber Electronics, HCLTech, Wipro, and Motherson Group, according to the news report.
Union Budget 2025
In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced the removal of import duties on key components used in mobile phone production, including printed circuit board assemblies, camera module parts, and USB cables.
This policy adjustment aims to eliminate uncertainties, enhance manufacturing competitiveness, and encourage greater domestic component production.
[The Business Standard]
