Giving exporters a competitive edge, Indian electronics, including laptops and smartphones, remain shielded from US tariffs due to an ongoing national security investigation.
The United States (US) has announced that it will continue to allow duty-free imports of laptops, smartphones, and servers from India, starting August 1, 2025. This exemption comes as the US maintains its ongoing Section 232 national security investigation into the potential impact of these products on national security.
The 25% reciprocal tariffs set to take effect from August will not apply to Indian electronics for the time being, offering a competitive advantage to Indian manufacturers in the US market.
Although China also enjoys this tariff-free status, India benefits from an additional edge, as Chinese electronics face a 20% Fentanyl duty. Electronics from Vietnam and Taiwan are similarly exempt, but the tariff landscape may change depending on the outcome of the Section 232 investigation.
In the June quarter, India surpassed both China and Vietnam to become the largest exporter of smartphones to the US, with a 44% share of total imports in the segment. This achievement highlights India’s growing role in the global electronics supply chain.
While the outcome of the national security probe could eventually lead to a shift in the tariff policy, experts believe any change would take time to implement. Additionally, there may be exceptions for products already integrated into US corporate supply chains.
Industry analysts suggest that India’s cost-competitive advantage remains a key factor. For instance, assembling an iPhone in India costs around $30 per unit.
Even with the 25% tariff, the total cost would rise to $37.50, still significantly lower than the $390 cost to manufacture the same unit in the US, primarily due to much higher labour costs.
But for now, Indian electronics remain insulated from Trump’s tariffs.
