India retains its advantage over China despite the Trump administration exempting popular consumer electronics items such as smartphones and personal computers from the steep reciprocal tariffs slapped on Beijing, said industry executives.
The executives remained positive about India sharply increasing consumer electronics exports to the US after the White House clarified on Sunday that such items would come under semiconductor sector-specific tariffs to be implemented within a month, indicating that the current relief is temporary.
Notably, experts predict India’s share in global iPhone manufacturing to at least double this calendar year, from 14-15% currently, as Apple Inc—the biggest beneficiary of the exemption—may accelerate its manufacturing shift to the South Asian country from China, despite easing of the near term compulsions to do so.
Dixon Technologies, India’s largest electronics contract manufacturer, which exports locally-assembled Motorola smartphones to the US, is set to hold talks with the latter this week to push for a greater share of exports from India. Dixon is in the process of expanding smartphone manufacturing capacity for exports.
Atul Lall, managing director, Dixon Technologies, told ET that while the tariff differential between China and India has been diluted, for smartphones, the 20% differential is significant. “We will be getting in discussion with our principal customer starting tomorrow (Monday) evening. Let’s see how they react,” he said , declining to name the client.
Lall emphasised that the flip-flop on tariffs by the US though has created an element of uncertainty. “All the stakeholders in the value chain will be waiting for some period of time to be sure which direction things are moving,” he said.
The exclusions, published late Friday by US Customs and Border Protection, narrow the scope of the tariffs by excluding smartphones, PCs, and other consumer electronics items from the 125% tariff on China, and the baseline 10% tariffs globally on nearly all other countries.
Beijing also clarified that the 125% tariff on US products is based on the manufacturing location rather than the technology origin, meaning that the vast majority of chipsets and components used on iPhones and other mobile phones made in China will not be hurt by the counter-tariffs.
While the initial expectation was that India would benefit significantly from the steep levies on China, the latest development has reduced the immediate advantage for New Delhi though not erasing it entirely.
Industry executives said Indian electronics manufacturers should continue to negotiate with US companies, emphasising upon them the benefits of manufacturing in the country. They also suggest that the Indian government should prioritise finalising the proposed bilateral trade agreement with the US to further enhance New Delhi’s position.
“Now there will be no extraordinary disruption. It’s time to set up capacities. The long term trend against China will remain robust,” said Pankaj Mohindroo, chairman, India Cellular and Electronics Association (ICEA). “The incredible shock of the last few weeks is in itself a tectonic event, and realignments are bound to happen without too much blood split in our category.”
According to ICEA, China will continue to face 20% tariffs on iPhones and all smartphones, laptops and tablets exported to the US. Only the so-called reciprocal tariffs have been removed. India and Vietnam have zero tariffs on these products, so the two countries are similarly placed, with both enjoying a 20% tariff advantage over China.
According to technology researcher TechInsights, despite the latest exemptions, iPhone manufacturing shift from China to India will continue and, in fact, accelerate. It added that in 2024, India manufactured 13%-14% of global iPhones, which should at least double in 2025.
“The electronics manufacturing industry in India should now go full steam ahead to negotiate contracts for the next one-two years with US companies because the mindset has changed, and technology companies will be looking at balancing and diversifying their supply chain,” said Ashok Chandak, president, India Electronics and Semiconductor Association (IESA).
Electronic Industries Association of India (ELCINA) added that India’s new policy on component manufacturing will help the country enhance local smartphone production and increase its competitiveness with other Asian rivals.
“The US stands as India’s largest electronics export destination, absorbing one-third of India’s total electronic goods exports. Specifically, this surge reflects the declining share of Chinese exports to the US, which dropped from 46% in 2018 to 24% in 2023,” it said.
Globally, Motorola smartphone sales total around 8-10 million units, out of which 1.5-2 million units are sourced from India. Lall said Dixon can meet most of Motorola’s export volumes from its Indian factories.
The executives remained positive about India sharply increasing consumer electronics exports to the US after the White House clarified on Sunday that such items would come under semiconductor sector-specific tariffs to be implemented within a month, indicating that the current relief is temporary.
Notably, experts predict India’s share in global iPhone manufacturing to at least double this calendar year, from 14-15% currently, as Apple Inc—the biggest beneficiary of the exemption—may accelerate its manufacturing shift to the South Asian country from China, despite easing of the near term compulsions to do so.
Dixon Technologies, India’s largest electronics contract manufacturer, which exports locally-assembled Motorola smartphones to the US, is set to hold talks with the latter this week to push for a greater share of exports from India. Dixon is in the process of expanding smartphone manufacturing capacity for exports.
Atul Lall, managing director, Dixon Technologies, told ET that while the tariff differential between China and India has been diluted, for smartphones, the 20% differential is significant. “We will be getting in discussion with our principal customer starting tomorrow (Monday) evening. Let’s see how they react,” he said , declining to name the client.
Lall emphasised that the flip-flop on tariffs by the US though has created an element of uncertainty. “All the stakeholders in the value chain will be waiting for some period of time to be sure which direction things are moving,” he said.
The exclusions, published late Friday by US Customs and Border Protection, narrow the scope of the tariffs by excluding smartphones, PCs, and other consumer electronics items from the 125% tariff on China, and the baseline 10% tariffs globally on nearly all other countries.
Beijing also clarified that the 125% tariff on US products is based on the manufacturing location rather than the technology origin, meaning that the vast majority of chipsets and components used on iPhones and other mobile phones made in China will not be hurt by the counter-tariffs.
While the initial expectation was that India would benefit significantly from the steep levies on China, the latest development has reduced the immediate advantage for New Delhi though not erasing it entirely.
Industry executives said Indian electronics manufacturers should continue to negotiate with US companies, emphasising upon them the benefits of manufacturing in the country. They also suggest that the Indian government should prioritise finalising the proposed bilateral trade agreement with the US to further enhance New Delhi’s position.
“Now there will be no extraordinary disruption. It’s time to set up capacities. The long term trend against China will remain robust,” said Pankaj Mohindroo, chairman, India Cellular and Electronics Association (ICEA). “The incredible shock of the last few weeks is in itself a tectonic event, and realignments are bound to happen without too much blood split in our category.”
According to ICEA, China will continue to face 20% tariffs on iPhones and all smartphones, laptops and tablets exported to the US. Only the so-called reciprocal tariffs have been removed. India and Vietnam have zero tariffs on these products, so the two countries are similarly placed, with both enjoying a 20% tariff advantage over China.
According to technology researcher TechInsights, despite the latest exemptions, iPhone manufacturing shift from China to India will continue and, in fact, accelerate. It added that in 2024, India manufactured 13%-14% of global iPhones, which should at least double in 2025.
“The electronics manufacturing industry in India should now go full steam ahead to negotiate contracts for the next one-two years with US companies because the mindset has changed, and technology companies will be looking at balancing and diversifying their supply chain,” said Ashok Chandak, president, India Electronics and Semiconductor Association (IESA).
Electronic Industries Association of India (ELCINA) added that India’s new policy on component manufacturing will help the country enhance local smartphone production and increase its competitiveness with other Asian rivals.
“The US stands as India’s largest electronics export destination, absorbing one-third of India’s total electronic goods exports. Specifically, this surge reflects the declining share of Chinese exports to the US, which dropped from 46% in 2018 to 24% in 2023,” it said.
Globally, Motorola smartphone sales total around 8-10 million units, out of which 1.5-2 million units are sourced from India. Lall said Dixon can meet most of Motorola’s export volumes from its Indian factories.
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