The United States’ decision to impose a 50% tariff on imports from India, starting on August 27th, is causing concern within the Indian electronics manufacturing sector. Faced with these tariffs, companies are shifting their focus toward local expansion and searching for new markets abroad. Notably, products like smartphones, tablets, laptops, and some telecom equipment are not affected by these tariffs.
Munoth Industries, which had plans to supply Anker in the US with 500,000 to 1,000,000 units each month, may see their US business affected if tariffs are levied on lithium cells. Jaswant Munoth, Chairman of Munoth Industries, highlighted that the US market offers higher profit margins and better quality control. Therefore, losing the US market would be a considerable financial setback.
Simultaneously, Dixon Technologies, which previously targeted growth in US phone exports by FY27, has adopted a wait-and-see approach. According to sources, Dixon cannot act decisively until the full implications of the tariffs are understood. The company intends to seek governmental support if tariffs are applied to mobile phones and semiconductor products in the third week of August.
The US has exempted certain products from the tariffs, including smartphones, laptops, tablets, and some telecom equipment, which fall under 17-18 HS codes. These exports are worth around $50 billion. However, other electronics products, such as electric inverters, battery chargers, and transformer parts, are subject to the 50% tariff under 14 HS codes.
As a result of these tariffs, Indian companies are actively exploring opportunities in markets other than the US. The Chamber of Trade and Industry (CTI) has recommended investigating markets like Germany, the UK, Singapore, and Malaysia, given the demand for engineering products in these countries. The CTI also advises reducing imports from the US and seeking global suppliers. While India aimed for $80 billion in electronics exports by 2030, the tariffs could cause losses of $20-30 billion. Certain companies, like Apple and Samsung, that are investing in the US may be exempt from these tariffs. Pankaj Mohindru, Chairman of the India Cellular and Electronics Association (ICEA), stated that the association will work with the government to overcome the challenges created by the tariffs.