Presenting India an opportunity to capture market share in electronics manufacturing, Trump’s return to the presidency may expand tariffs on Chinese imports, experts say.
On Wednesday, the results of the U.S. presidential election made it clear that Donald Trump is poised to return for his second term. Industry leaders believe that Trump’s return to the presidency will likely lead to the expansion of tariffs on Chinese imports, including products like phones and laptops, which could benefit India’s electronics manufacturing sector.
According to a report by Communications Today, this shift presents an opportunity for India to capture market share from China, as companies seeking to avoid new tariffs may be drawn to India’s focus on infrastructure and improving the business climate.
Sunil Vachani, president of the Consumer Electronics and Appliances Manufacturers Association and founder of Dixon Technolgoies, noted that Trump’s repeated mentions of tariffs on neighbouring countries could drive companies to seek alternatives, with India emerging as the top choice for electronics manufacturing. He highlighted sectors like lighting, telecom, and wearables as promising, owing to India’s robust in-house R&D and local sourcing.
Trump has suggested imposing up to 60% tariffs on Chinese imports and revoking China’s trade status. In July 2018, during his first term, he implemented tariffs ranging from 7.5% to 25% on 800 Chinese products, totalling $34 billion in annual trade, though key electronics like smartphones and laptops were excluded.
Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association, commented on the growing India-U.S. relationship in technology and other strategic areas. He noted that bilateral ties were strengthened during Trump’s first term across critical sectors.
With global supply chains shifting, he said India has the potential to become a trusted partner in electronics manufacturing and expressed eagerness to strengthen the partnership for mutual benefit further.
CT also cited the need for India to act swiftly to capitalise on upcoming tariff changes. According to their source, during Trump’s 2018 tariffs, India was slow to respond, allowing countries like Vietnam and Mexico to take advantage. India has time until the next budget to address issues such as tariffs, regulatory clarity, and business ease to fully seize the opportunity.
At a rally in Pennsylvania, Trump reportedly stated that he would impose a 25% tariff on goods from Mexico and apply similar measures against China for exporting fentanyl to Mexico. These additional tariffs would further exacerbate the internal difficulties facing China’s economy due to weakened consumer demand.
Bharath Desareddy, CEO of SmartSoC, suggested that India’s electronics and manufacturing sectors are at a critical juncture. The potential rise in tariffs on Chinese imports could position India as a major alternative in global manufacturing. He highlighted India’s large labour force, government support, and expanding infrastructure as key advantages.
Desareddy emphasised that if India acts swiftly, it could strengthen its role in the global supply chain and attract significant investment.
Numerous American companies are increasingly eyeing India for its favourable manufacturing environment, driven by a large domestic market and government incentives like the Production-Linked Incentive (PLI) scheme. As a result, India’s electronic exports have experienced substantial growth, with shipments rising 19.74% year-over-year to $15.64 billion in the first half of FY25, according to Mint.
