Trump's Tariff Twist: A Small Win for Indian Smartphone Exports

 

 

 

US President Donald Trump’s unpredictable tariff decisions may bring a modest benefit to Indian smartphone manufacturers. According to a report by Crisil, the recent US import duties could create a small opening for India in the global smartphone market—especially as the US begins to look beyond China for electronics.

During the high-profile Liberation Day event on April 2, Trump announced a sweeping list of “reciprocal tariffs” targeting various trade partners, aiming to rebalance what he considers unfair trade practices. 

 

However, just a week later, he paused these duties for 90 days, sparking confusion and mixed reactions from global markets. “I have authorised a 90-day pause, and a substantially lowered reciprocal tariff during this period, of 10 per cent, also effective immediately,” Trump had said.

 

Despite the temporary pause, Trump has kept up the pressure on China, suggesting that tariffs on China-made electronics—particularly smartphones—will remain firmly in place.

This development could work in India’s favor. China currently dominates the global electronics export market, but rising trade tensions with the US may push American importers to seek alternative sourcing destinations. While Vietnam, Mexico, and other Southeast Asian nations are strong contenders, India is slowly becoming a viable option due to its growing smartphone manufacturing ecosystem.

Crisil notes that India has been ramping up local production thanks to the government’s Production Linked Incentive (PLI) schemes and increased investment from major global players like Apple and Samsung. These companies have already started exporting from India, although the volumes are still small compared to China.

 

The uncertainty surrounding the tariffs may also dampen investment sentiment for corporates (global as well as domestic). For India, merchandise exports to the US accounted for only 2.0-2.5 per cent of the gross domestic product (GDP) in the three years through fiscal 2024.

However, the real challenge for India lies in scaling up fast enough to meet global demand. Infrastructure gaps, regulatory hurdles, and component import dependencies still weigh down the country’s competitiveness. As such, any gains from the current US-China tensions are likely to be marginal in the short term.

For smartphones, the impact is revised to ‘moderate’ (from ‘high’ earlier) as higher tariffs on competing countries China and Vietnam render India a more-viable potential supplier to US-based customers. Still, experts believe that this could be a stepping stone. If India continues to strengthen its supply chains and manufacturing capabilities, it could gradually capture a larger share of the global smartphone export market.