In response to hit-back on nations taxing America, US President Donald Trump has said that reciprocal tariffs will be applied to many nations beginning April 2. He mentioned high tariffs in nations such China, Brazil, and India when making the announcement, but Indian officials held out hope for a settlement that may let India escape the duties and ultimately result in a trade deal by this fall.
Although Trump did not particularly mention electronic products in his joint session speech to the US Congress, Mint analysis shows that Indian electronics constitute a major import for US technology companies.
Global businesses like Apple, which rely on India as a low-cost, electronics manufacturing base, will thus see their total prices rise and this will pressure the advantage India currently has over other countries.
With regard to magnitude, India’s net electronic exports close to $30 billion. Of this, sixty percent are cellphones and two-thirds are Apple’s iPhones.
About Indian taxes, what did Trump say?
On vehicle imports from the US, Trump called the tariffs applied by several nations on US goods “very unfair” and singled out “higher than 100%” duties he said India now levies.
India levies what taxes on US-originating electronics?
From 20% to 15%, the Centre in the interim Union budget last year lowered the import tariff on cellphones. Smartwatches likewise currently pay a 20% import duty.
The US tariffs will have what effect?
According to the study, which quoted their reasoning—that India is a cheap market in many cost considerations allowing them to develop huge factories—India’s electronic manufacturers do not now believe the tariffs will instantly affect them.
The effect will only be seen, though, if India applies more reciprocal taxes, therefore lowering the cost benefits for businesses like Apple and Samsung.
Trade policy experts featured in the paper said that reciprocal tariffs are “akin to a geopolitical conflict” and that brands may be forced to raise prices to preserve operational margins should neither country back down from the high charges.
Another issue of importance is the projected bilateral trade deal between India and US since the mutual understanding would greatly help India in its attempt to surpass China.
