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The recent tariffs imposed by US President Donald Trump on global imports have sparked worries about increased production expenses and potential disruptions within supply chains. While these tariffs chiefly target exports to the United States—leading to predicted price hikes and economic downturns—the repercussions for India’s smartphone industry and its manufacturing landscape could be significant yet indirect. Particularly, the potential effects on Apple iPhones, which have a considerable portion of their production coming from China, Vietnam, and India, warrant attention.
Insights from industry experts speaking with Digit suggest that while the direct consequences of these tariffs on smartphone pricing within India are expected to be minimal, there remains a concern that escalating input costs could compel manufacturers to reassess their pricing strategies globally. This adjustment, in turn, may lead to eventual price hikes for Indian consumers.
“Given that the tariffs from the Trump era are principally aimed at US exports, the immediate influence on smartphone pricing in India seems limited. However, should these tariffs lead to a rise in input costs for original equipment manufacturers (OEMs), there is a possibility that some of these costs will be passed down to consumers, which could, in the long run, elevate prices,” explained Prabhu Ram, Vice President of the Industry Research Group at CyberMedia Research.
Leading smartphone manufacturers like Apple, Samsung, and Xiaomi rely heavily on components sourced from nations such as China, Vietnam, and Taiwan—all of which are facing heightened tariffs of 34%, 46%, and 32%, respectively. Should production costs escalate due to these tariffs, manufacturers might need to offset their losses by raising prices in several markets, including India. This adjustment could notably affect the market for premium smartphones, where price sensitivity is already a factor.
Moreover, the ramifications of US tariffs may unintentionally enhance India’s manufacturing capabilities. With China, Vietnam, and Taiwan grappling with substantial tariff surges, India can emerge as a compelling option for companies seeking to diversify their supply chains.
The Indian government’s Production Linked Incentive (PLI) scheme is already attracting substantial investments from prominent smartphone brands, and the new tariffs could further incentivize firms to expand their local manufacturing capabilities. Nonetheless, experts underscore that challenges remain in this landscape.
“The ripple effects from the recent tariffs could inject new energy into the ‘Make in India’ initiative. However, to fully harness the shifts in global supply chains, India must not only seize this moment but must also intensify policy reforms and expedite infrastructural development,” Prabhu Ram noted.
The subject of semiconductor manufacturing has garnered significant global attention, with India persistently promoting a Make-In-India strategy. Major players like NVIDIA, Intel, AMD, and Qualcomm have established their R&D and validation operations within the country, yet large-scale chip manufacturing remains a distant objective.
Should the US decide to impose tariffs on semiconductor imports down the line, India’s electronics manufacturers could encounter escalated costs for crucial components, complicating local smartphone production endeavors.
On a more optimistic note, these tariffs might catalyze investment in India’s semiconductor sector, paving the way for the development of chip assembly and fabrication units locally. Experts contend that government support, robust partnerships, and effective policy reforms will be integral to this endeavor.
“India has been making aggressive strides toward semiconductor self-sufficiency, and tariffs on China and other Asian markets could potentially accelerate investment in Indian chip design, outsourced assembly and test (OSAT), and the future construction of fabrication facilities,” indicated Tarun Pathak, Research Director at Counterpoint Research.
“Nevertheless, scaling semiconductor manufacturing is easier said than done. This sector necessitates enormous capital investments, advanced technology transfers, and a highly skilled workforce. Should India manage to navigate these challenges, it could position itself as a viable alternative hub for chip assembly and manufacturing, reaping benefits from the realignment of supply chains instigated by US tariffs,” he added.
“Conversely, should semiconductor tariffs be enacted, India’s electronics manufacturers may grapple with higher costs. The country must act swiftly to enhance domestic production capacity to mitigate long-term reliance on costly imports,” he cautioned.
