How lower US tariffs could boost India's electronics exports
What's the story
The United States has announced a major reduction in tariffs on Indian goods, a move that could have far-reaching implications for the global electronics and semiconductor industry. The new trade agreement, announced on February 2, lowers US tariffs on Indian goods to an 18% ceiling from a steep 50%. In exchange, India has pledged to reduce its own trade barriers and increase imports of US energy, technology, and agricultural products.
Manufacturing boost
Tariff relief to further boost India's smartphone exports to US
The tariff relief is expected to further boost India's smartphone exports to the US, which have already tripled from $4.1 billion in FY25 to $12.54 billion between April and November FY26. The new tariff framework will help manufacturers cut costs and improve efficiency by lowering friction across tightly integrated global supply chains where components often cross borders multiple times before final assembly.
Corporate advantage
Apple, Foxconn poised to benefit from tariff reduction
Apple and its primary contract manufacturer, Foxconn, are already in a position to benefit from the tariff reduction. The tech giant now manufactures several iPhone models in India, with a large share going to export markets. This could further boost India's status as an emerging electronics manufacturing powerhouse.
Ecosystem impact
Broader implications for India-US cooperation under TRUST and iCET initiatives
The tariff reduction also impacts the broader India-US cooperation under TRUST and iCET initiatives, which seek to align critical-mineral access, trusted chip manufacturing, and advanced packaging between the two countries. Despite selective restrictions on sensitive semiconductor products for national security reasons, the overall easing of trade barriers improves prospects for locating chip design, testing, and fabrication activities in India.