2 weeks Ago
New Delhi/Kolkata: Donald Trump ’s second term as US president could boost India 's burgeoning electronics manufacturing industry as Washington is expected to erect a tariff wall to keep Chinese shipments out of consumer shelves, making it imperative for sourcing managers to look beyond the current factory to the world. As imports from China are snagged in the tariff nets, the electronics industry expects a large chunk of production to shift to other countries, including India. Trump , who became the 47th President of the US on Wednesday, is expected to include smartphones and laptops in the list of items that attract a steep 25% anti-dumping tariff if imported from China.
During his election campaign, he has time and again stressed on steep import duties from China. Advt "Trump's victory will open up new avenues for India," said Atul Lall, Managing Director, Dixon Technologies . Lall said large companies will make India a prominent manufacturing base for their global supply chains.
Dixon Technologies , which uses the Centre’s production-linked incentive (PLI) scheme for mobile phones and IT hardware, manufactures for almost all the leading mobile phone brands and will soon start making IT hardware products. It exports a bulk of smartphones produced for Motorola to the US. "Right now, electronics and smartphone manufacturing are mainly for the domestic market, and exports are dominated by Apple and Samsung.
If there are tariff barriers imposed on China, it will open up floodgates for Indian manufacturing and exports," said Lall. Industry executives believe increasing tariffs on Chinese goods will make companies shift capacity to other countries from where they can be exported to the US. Kamal Nandi, business head at appliances manufacturer Godrej Appliances, said India will gain from the US election results, helping accelerate the component production base as the country becomes the destination for making more electronics products.
Large Chinese companies that manufacture for global brands are already increasing their presence in India. Two of the largest ODMs (original design manufacturers) from China, Huaqin and Longcheer, are in the process of partnering with Indian contract manufacturers to work around the geopolitical impact. Advt Trump's India Policy “An unknown variable here is what Trump thinks about India.
He has spoken about Indian tariffs on US products being predatory in nature. It remains to be seen how India is treated,” said Rajoo Goel, secretary general, ELCINA (Electronic Industries Association of India). Market trackers also believe the US may impose strict sourcing requirements for locally made products, which may bode well for India’s plans to become a hub for electronics component manufacturing.
“Under a Trump administration, an emphasis on isolating the US economy could accelerate efforts to shift production away from China, potentially through increased tariffs and stricter sourcing requirements for domestic manufacturing,” said Yang Wang, senior analyst, Counterpoint Research. Contract manufacturer Syrma SGS said global companies are likely to remain encouraged to diversify their supply chains and invest in alternative hubs like India, after the election results. 'Near-Shoring' Syrma SGS Managing Director JS Gujral said establishing a robust integration setup in North America may become necessary to facilitate smoother operations.
The industry, though, remains concerned about expanding capacity to absorb the expected shift in production. “With Trump expected to clamp down hard on China, the industry will now be scrambling to increase capacity. The 2018 tariff imposition on China did not help India as much, but we need to be more proactive this time to take the best advantage of this opportunity,” said a senior industry executive, declining to be named.
The executive added that going forward, New Delhi will need to engage with Washington even more, create more outreach and improve advocacy with US companies. “Capacity building may not be an issue now with increased government support for that, but we need to sell the India story even more to US companies,” said Ashok Chandok, President, India Electronics and Semiconductor Association. Chandok highlighted a strong rapport between New Delhi and Washington will be an advantage for the industry.
“With India and the US, the technology partnership between companies is much deeper, which is expected to be ramped up even further. One of the largest American mobile phone brands (read: Apple) are increasingly exporting from India,” Chandok said. By Subhrojit Mallick & Writankar Mukherjee , ET Bureau Published On Nov 7, 2024 at 07:32 AM IST Telegram Facebook Copy Link Be the first one to comment.
Comment Now COMMENTS Comment Now Read Comment (1) All Comments By commenting, you agree to the Prohibited Content Policy Post By commenting, you agree to the Prohibited Content Policy Post Find this Comment Offensive? Choose your reason below and click on the submit button. This will alert our moderators to take actions REASONS FOR REPORTING Foul Language Defamatory Inciting hatred against a certain community Out of Context / Spam Others Report Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Download ETTelecom App Get Realtime updates Save your favourite articles Scan to download App Donald Trump dixon technologies India electronics manufacturing Trump India policy Trump US-China trade relations India smartphone manufacturing US tariffs on China Dixon Technologies india.
