The U.S. government\u2019s decision to impose a 27 percent reciprocal tariff on Indian imports initially triggered a sharp selloff across Indian equity markets, with sectors like IT, metals, and auto taking a hit. However, as market participants digest the full implications of this policy shift, a potential advantage emerges for India\u2019s electronics manufacturing services (EMS) sector.<\/p>\n
Compared to the punitive tariff rates imposed on other major U.S. trading partners\u2014such as China (54 percent), Vietnam (46 percent), and Sri Lanka (44 percent)\u2014India\u2019s tariff burden remains relatively moderate. This has led analysts to suggest that Indian EMS players could emerge as beneficiaries of the shifting global supply chain dynamics.<\/p>\n
Sonam Srivastava, Founder and Fund Manager at Wright Research PMS, highlighted this trend. \u201cElectronics manufacturing services may benefit relatively, as India\u2019s tariff rate is lower than those on Vietnam and China, potentially making India a more attractive destination in global supply chain realignments,\u201d she stated.<\/p>\n
India\u2019s 27% tariff rate is lower than China (54%) and Vietnam (46%), making it a more attractive trade partner.<\/p>\n<\/li>\n
Indian EMS companies could gain as global supply chains shift in response to the new tariff regime.<\/p>\n<\/li>\n
Potential market realignment may boost domestic electronics manufacturing.<\/p>\n<\/li>\n<\/ul>\n
One of the key sectors that could be affected by these tariff changes is India\u2019s growing mobile phone export industry, particularly Apple\u2019s iPhone assembly operations. A report by Emkay Global points out that over half of India\u2019s electronics exports to the U.S. comprise mobile phones, predominantly iPhones manufactured in India and shipped to the U.S. market.<\/p>\n
The imposition of reciprocal tariffs could make these products significantly more expensive for American consumers. Emkay Global\u2019s research highlights an important contrast in tariff structures: while India levies a 15 percent duty on fully assembled phone imports, the U.S. has traditionally maintained a zero-tariff policy on such goods. If America were to mirror India\u2019s 15 percent duty as part of its reciprocal tariff strategy, it would drive up the price of India-assembled iPhones for U.S. buyers.<\/p>\n
Over 50% of India\u2019s electronics exports to the U.S. are mobile phones, mainly iPhones.<\/p>\n<\/li>\n
New tariffs could raise the cost of India-made iPhones for American consumers.<\/p>\n<\/li>\n
Potential impact on Apple\u2019s supply chain and pricing strategies in the U.S. market.<\/p>\n<\/li>\n<\/ul>\n
To counteract potential trade disruptions, the Indian government has been actively supporting its electronics manufacturing sector through policy measures. Last month, the Ministry of Electronics and Information Technology announced a new Production-Linked Incentive (PLI) scheme to encourage non-semiconductor electronics manufacturing, marking a strategic push to enhance India\u2019s role in global electronics production.<\/p>\n
The scheme, with a financial outlay of \u20b922,919 crore, is expected to create over 91,600 direct jobs and attract investment worth approximately \u20b959,350 crore. Union Electronics and IT Minister Ashwini Vaishnaw emphasized the importance of passive electronic components in India\u2019s long-term manufacturing strategy, stating, \u201cPassive components are approved under the Electronics Component PLI scheme. It has a total package of \u20b922,919 crore, to be implemented over six years.\u201d<\/p>\n
Leading EMS companies such as Dixon Technologies, Kaynes Technology, and Amber Enterprises are poised to benefit from these incentives. Additionally, the increasing focus on reducing reliance on China through the \u201cChina+1\u201d strategy aligns well with India\u2019s manufacturing ambitions.<\/p>\n
\u20b922,919 crore allocated to boost non-semiconductor electronics manufacturing.<\/p>\n<\/li>\n
91,600 new jobs expected to be created through the initiative.<\/p>\n<\/li>\n
Key beneficiaries include Dixon Technologies, Kaynes Tech, and Amber Enterprises.<\/p>\n<\/li>\n<\/ul>\n
Despite the potential benefits, some analysts caution that India has yet to capitalize on China\u2019s weakening hold in various industries. A report by Emkay Global indicates that approximately 75 percent of China\u2019s exports comprise high-complexity products, compared to just 45 percent for India.<\/p>\n
While China has lost market share in lower-value industries such as textiles, footwear, and jewelry, it has managed to strengthen its presence in high-tech sectors such as electric vehicles, advanced machinery, and engineering equipment. Meanwhile, India\u2019s gains have been limited primarily to basic commodity exports.<\/p>\n
The report further notes that, aside from telecom equipment, India has struggled to replace China\u2019s exports in key areas. In fact, India has even lost market share in gems, jewelry, and textiles\u2014sectors where it traditionally had a strong foothold.<\/p>\n
China still dominates high-tech exports, while India\u2019s share remains limited.<\/p>\n<\/li>\n
India has failed to significantly replace China in major global supply chains.<\/p>\n<\/li>\n
Sectors like gems, jewelry, and textiles have seen India\u2019s market share decline rather than grow.<\/p>\n<\/li>\n<\/ul>\n
While the imposition of U.S. reciprocal tariffs presents challenges for Indian exports, it also offers an opportunity for India to enhance its position in the global electronics manufacturing sector. With a more favorable tariff structure compared to China and Vietnam, India\u2019s EMS firms could attract increased foreign investment and supply chain realignments.<\/p>\n
However, for India to fully capitalize on this potential, structural improvements in high-tech manufacturing and R&D investment will be essential. The success of the PLI scheme, along with further policy initiatives to strengthen the domestic value chain, will play a crucial role in determining whether India can emerge as a dominant force in global electronics production.<\/p>\n
Government support through the PLI scheme to enhance domestic electronics manufacturing.<\/p>\n<\/li>\n
India\u2019s lower tariff rates relative to China and Vietnam may attract global investors.<\/p>\n<\/li>\n
Expansion of the EMS sector could position India as a competitive alternative to China in the global supply chain.<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"
India\u2019s Tariff Rate Lower Than China and Vietnam, Making It a Potential Winner The U.S. government\u2019s decision to impose a 27 percent reciprocal tariff on Indian imports initially triggered a sharp selloff across Indian equity markets, with sectors like IT, metals, and auto taking a hit. However, as market participants digest the full implications of […]<\/p>\n","protected":false},"author":4,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1362,1365],"tags":[],"ppma_author":[1331],"class_list":{"0":"post-6334","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-and-economy-news","8":"category-business-news"}," _eael_post_view_count":0,"authors":[{"term_id":1331,"user_id":4,"is_guest":0,"slug":"sourabh","display_name":"Sourabh Sharma","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/6334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=6334"}],"version-history":[{"count":2,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/6334\/revisions"}],"predecessor-version":[{"id":6337,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/6334\/revisions\/6337"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/6335"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=6334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=6334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=6334"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=6334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}