The decision of US government to temporarily suspend steep reciprocal tariffs on China for 90 days is reportedly unlikely to derail the momentum of mobile phone and component manufacturing in India, thanks to the country’s continued 20 per cent tariff advantage that presents an opportunity for exporters.
India remains well-positioned as a preferred alternative in global supply chains, amid ongoing efforts by companies to reduce dependency on China. However, there is a caution that the fast-evolving geopolitical landscape, especially with the US administration, leaves little room for complacency.
Despite the recent US-China agreement in Geneva, India retains a 20 per cent tariff edge for exports to the US, but only until July 9, 2025, when the US’s suspension of reciprocal tariffs on Indian goods expires. Failure to reach a bilateral agreement by then could see India face a 26 per cent tariff, although such a scenario appears unlikely, with both nations actively negotiating a trade deal.
Currently, US-bound exports of smartphones, laptops, and tablets from India attract zero duty, offering a clear cost advantage over Chinese exports, which face a 20 per cent levy. Under the new US-China deal, reciprocal tariffs have been reduced from 125 per cent to 10 per cent, while the Trump-era’s 25 per cent tariffs on various imports and 20 per cent duty on fentanyl remain.
Further, in India’s favour, government production-linked incentive (PLI) schemes and growing manufacturing scale are helping offset a 7-10 per cent cost disadvantage compared to China. Moving ahead, industry leaders remain optimistic about sustained global investment in India’s electronics manufacturing ecosystem.
