In view of the new duty policy of the Trump government, there is scope for increasing the export of electronics, especially smartphones, manifold in the US. Electronics manufacturers say that to take advantage of this opportunity, India will have to change its duty policy keeping in mind the US duty policy. If this is not done, other countries like Vietnam can take advantage of it.
Smartphone exports worth six billion dollars in the US
The US has announced to impose reciprocal tariffs from April 2. In the financial year 2023-24, India exported electronics items worth $10 billion to the US. Smartphones accounted for 60 percent of these.
That means smartphones worth about six billion dollars were exported to the US. The US imports smartphones worth 60 billion dollars annually. Therefore, India has full scope to increase smartphone exports to the US market.
China still remains the biggest supplier of electronic items in the US market. But recently the US has imposed an additional duty of 20 percent on China. This will make Chinese items very expensive.
Vietnam will take advantage
India charges a duty of 7.5-20 percent on electronics items coming from America. According to the India Cellular and Electronics Association, Vietnam can benefit from this situation because there is no duty on American electronics items in Vietnam. In such a situation, multinational companies manufacturing electronics items can also set up manufacturing units in Vietnam instead of India.
