With a reciprocal tariff rate of 27% imposed by the United States starting April 9, India stands in a favourable position compared to competitors like Vietnam (46%), Thailand (36%), and China (54% – 34% reciprocal plus additional 20% ). However, it will face challenges from manufacturing nations such as Turkey, Brazil, and the Philippines, with duties of 10%, 10%, and 17%, respectively.
Analysts said that India’s long-term success hinges on securing a robust bilateral trade agreement (BTA) with the US as other countries are also expected to open lines for similar pacts.
In the electronics and smartphone sectors, India’s edge is clear. Vietnam and Thailand, key manufacturing hubs for global giants like Samsung and Apple, face steep tariffs that erode their cost competitiveness. India’s 27% tariff, coupled with the production-linked incentive (PLI) scheme, positions it as an attractive alternative.
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According to India Cellular and Electronics Association (ICEA), India has fared well in the initial round of tariff adjustments, emerging favourably, especially when compared to key electronics export competitors such as China, Vietnam, Thailand, and Indonesia, owing to the relentless efforts of our negotiators and leaders.
“The true long-term inflection point for India’s electronics trade with the US will rest on the successful conclusion of a bilateral trade agreement (BTA),” Pankaj Mohindroo, ICEA chairman said.
According to Mohindroo, BTA must now become the cornerstone of our trade strategy, to help unlock stable market access, tariff predictability, and a framework for scaling high-value electronics exports.
“As we await possible retaliatory moves from other major economies, our deepest focus must remain on converting this strategic opening into sustained export growth and supply chain integration,” Mohindroo said.
According to MAIT, the industry body representing the electronics and ICT hardware sector, India’s $7 billion smartphone exports to the US may face some pressure due to evolving trade policies, but the real advantage lies in the comparative tariffs imposed on competing economies like China (54%) and Vietnam (36%). “While US trade barriers could theoretically dampen India’s export volumes, the higher reciprocal tariffs on China and Vietnam create a relative advantage for Indian manufacturers. This discrepancy tilts the scales in India’s favour, making its exports comparatively more appealing,” It said in its analysis.
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