US Tariff on China Benefits India’s Electronics Export Sector
The US 10% import tariff on Chinese goods is seen as beneficial for India’s electronics exports, especially for smartphones and laptops. Indian manufacturers can leverage the current situation to increase production and exports, fulfilling domestic and global demand while aiming for a $500 billion target by 2030 in electronics production.
A recent 10% import tariff imposed by the United States on Chinese goods is being perceived positively for India’s electronics exports, including smartphones, laptops, and tablets. Analysts suggest that Indian contract manufacturers such as Dixon Technologies, Syrma SGS, and Optiemus may benefit as demand rises for products they export that are exempt from tariffs due to the trade shift away from China.
As the US imposes higher tariffs, Indian companies are leveraging the “China Plus One” strategy, encouraged by the government’s production-linked incentive (PLI) schemes for electronics and smartphones. In FY24, India’s electronics production reached $115 billion, with mobile phones accounting for $52 billion. Projections indicate that this output may reach $140 billion by FY25, part of the government’s ambitious target of $500 billion in electronics production by 2030.
To meet the 2030 goal, the Electronics Component Manufacturing sector must grow at an annual rate of 20-22%. Satendra Singh, CEO of Syrma SGS, highlighted that supply chain diversification and higher US tariffs create a significant opportunity for India to enhance its electronics exports. Companies are expanding capacities and improving technological capabilities, thereby increasing their competitiveness in global markets.
Analysts believe that companies such as OnePlus may explore shipping smartphones from India, while Tarun Pathak, research director at Counterpoint India, noted that the absence of tariffs on India creates an opportunity for the country to serve as an alternative supplier, given the maturity of the local assembly process and production capacity.
The imposition of a 25% levy on imports from Canada and Mexico by President Donald Trump, along with the 10% tax on Chinese imports, reflects broader concerns, and Indian officials assert that the country stands to gain significantly from these changes, which may also enhance local value addition in manufacturing.
Faisal Kawoosa, chief analyst at Techarc, remarked that new opportunities appear for electronics and smartphone companies previously not operating in India. Experts believe that a robust electronics manufacturing sector, supported by both domestic and international demand, will foster component manufacturing, potentially further boosting value addition in India.
To remain competitive globally, industry players must concentrate on developing world-class manufacturing capabilities, robust infrastructure, and simplifying regulatory processes. Favorable bilateral trade agreements are also essential for Indian companies to access and penetrate global markets effectively.
The recent US tariffs on Chinese imports are reshaping the landscape for electronic products globally, with India poised to capitalize on these changes. With initiatives in place to encourage local production through government support, India’s electronics sector is on the verge of significant growth. The strategic shift away from reliance on Chinese manufacturing offers Indian companies a chance to strengthen their global presence while meeting increasing demand for electronic goods.
In summary, the US tariffs on Chinese goods present a significant opportunity for India’s electronics manufacturers. By adopting the ‘China Plus One’ strategy, Indian companies can enhance their production capabilities and expand their export markets. With a robust growth trajectory projected for the electronics industry, there is a strong incentive for both government and private entities to invest in developing world-class manufacturing strategies.
Original Source: www.financialexpress.com
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