US President Donald Trump has stated that reciprocal tariffs will probably be imposed on a number of international locations from April 2, as a measure to hit-back on international locations that tax America. Whereas making the announcement, he cited excessive tariffs in international locations reminiscent of China, Brazil and India, however Indian officers held out hope for a decision that would assist India escape the tariffs and ultimately culminate in a commerce deal by this fall.
US President Donald Trump speaks throughout an govt order signing ceremony within the Oval Workplace of the White Home in Washington, DC, US, on Thursday, March 6, 2025.(Al Drago/Bloomberg)
Although Trump did not particularly check with digital items in his joint session handle of the US Congress, Indian electronics are nonetheless a key merchandise imported by US tech corporations, in line with a Mint report.
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Consequently, world manufacturers like Apple which use India as a producing hub can see their total prices enhance and this could pressurize the benefit India presently has over different international locations as a low-cost, electronics manufacturing vacation spot.
On the subject of scale, India’s internet exports of electronics quantity to $30 billion. 60% of that is smartphones and two-thirds of these are Apple’s iPhones.
What did Trump say about Indian tariffs?
Trump labelled the tariffs imposed by numerous international locations on US items as “very unfair” and singled out “higher than 100%” tariffs that he claimed India presently imposes, however this was on automotive imports from the US.
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What tariffs does India impose on US-origin electronics?
The Centre within the interim Union finances final 12 months decreased the import tariff on smartphones from 20% to fifteen%. Equally, smartwatches are also presently dealing with a 20% import obligation.
What would be the impression of the US tariffs?
As of now, India’s digital producers do not assume the tariffs would instantly harm them, in line with the report which cited their reasoning being that India is an affordable market in numerous price components which permit them to construct massive factories.
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Nonetheless, the impression will happen provided that India imposes additional reciprocal duties which would scale back price advantages for corporations like Apple and Samsung.
The report cited commerce coverage specialists as saying that reciprocal tariffs are “akin to a geopolitical battle” and that if neither nation backs down from the heavy taxes, manufacturers could also be compelled to extend costs to take care of working margins.
The India-US bilateral commerce treaty anticipated to happen later this 12 months can be some extent of focus, for the reason that mutual understanding may give a significant benefit to India in its bid to outpace China.