New Delhi— With the United States imposing a 34% tariff on Chinese electronics and 46% on Vietnamese imports, India’s comparatively lower 27% tariff could significantly shift global supply chain dynamics, offering a growth boost to the country’s tech hardware sector, according to a new report by CLSA.
India’s electronics manufacturing ecosystem—particularly in smartphones—is expected to benefit from the rebalancing of trade routes as the U.S. clamps down on imports from key Asian countries, the report said.
The U.S. currently imports $51 billion worth of smartphones, with China, Vietnam, and India serving as primary suppliers. With rising trade barriers against China and Vietnam, India’s role as a viable alternative is growing stronger.
Tech giants Apple and Samsung already maintain substantial manufacturing operations in India. The combination of lower tariffs, a large and growing domestic market, and increasing backward integration—fueled by the Production-Linked Incentive (PLI) scheme—has positioned India as an increasingly competitive electronics hub.
Dixon Technologies, a major Indian electronics manufacturer, is expected to be one of the key beneficiaries of this supply chain shift, according to CLSA. While Apple and Samsung primarily operate through in-house or non-listed partners, Dixon’s publicly listed status and expanding capabilities make it a standout player in the Indian ecosystem.
Other industry reports suggest that the direct impact of U.S. reciprocal tariffs on Indian sectors will be limited. For electronics, textiles, agricultural products, chemicals, and automobiles, the effects are projected to be largely neutral, according to CareEdge Ratings. In particular, for electronics, the higher tariffs on Chinese goods could create a favorable opportunity for Indian exporters.
Adding to this momentum is the government’s recently announced ₹22,919 crore Electronics Component Manufacturing Scheme (ECMS). The initiative aims to strengthen local production of essential sub-assemblies and components such as inductors, resistors, PCBs, and capacitors, while also generating large-scale employment.
The ECMS is expected to attract ₹59,350 crore in investment, produce goods worth ₹4,56,500 crore, and create 91,600 direct jobs, along with numerous indirect employment opportunities over its tenure.
India’s electronics sector has witnessed impressive growth over the past decade:
- Fivefold increase in production over 10 years, growing at a 17% CAGR to reach ₹9.5 lakh crore in 2024.
- Sixfold increase in exports, growing at a 43% CAGR, hitting ₹2.4 lakh crore in 2024.
Electronics have now emerged as one of India’s top three export categories, marking a significant milestone in the country’s transformation into a global electronics manufacturing hub. (Source: IANS)
