New Delhi– With the U.S. imposing tariffs of 34% on Chinese tech imports and 46% on Vietnamese goods, India’s comparatively lower tariff of 27% may shift global supply chain dynamics, potentially boosting the country’s tech hardware sector, according to a new report.
India’s electronics manufacturing—particularly in the smartphone segment—is poised to gain a competitive advantage amid these new U.S. trade policies, said a report by CLSA.
The global supply chain realignment could favor India, especially in smartphone production, the report noted. The U.S. currently imports $51 billion worth of smartphones, with China, Vietnam, and India being key contributors.
Apple and Samsung already maintain substantial manufacturing operations in India. The country’s lower tariffs, coupled with a large domestic market and increasing backward integration—supported by the Production-Linked Incentive (PLI) scheme—strengthen its cost competitiveness in the sector.
Dixon Technologies is likely to emerge as a major beneficiary of this shift in global supply chains, according to CLSA. While Apple and Samsung primarily rely on in-house assembly or partners not listed in India, Dixon’s involvement in the manufacturing ecosystem is expected to expand significantly.
Other reports suggest that the impact of U.S. reciprocal tariffs will vary across Indian sectors. For electronics, textiles, agricultural goods, chemicals, and automotive parts, the effect is expected to be largely neutral. In electronics, specifically, higher tariffs on Chinese exports may provide an indirect advantage to Indian manufacturers, according to CareEdge Ratings.
Meanwhile, the recently launched ₹22,919 crore Electronics Component Manufacturing Scheme (ECMS) is expected to further boost local production. The scheme focuses on the domestic manufacturing of sub-assemblies and essential components like inductors, resistors, PCBs, and capacitors.
The ECMS aims to attract ₹59,350 crore in investments, generate production worth ₹4,56,500 crore, and create 91,600 direct jobs, along with numerous indirect employment opportunities.
India’s electronics sector has seen a fivefold increase in production over the past decade, growing at a compound annual growth rate (CAGR) of 17% to reach ₹9.5 lakh crore in 2024. Employment in the sector has also grown significantly, with 2.5 million jobs created.
Exports have surged sixfold, growing at a CAGR of 43% to reach ₹2.4 lakh crore in 2024, making electronics one of India’s top three export categories. (Source: IANS)
