Sign in Subscribe
Exports

Trump's Tariff Move on India: A Potential Blow to Electronics Exporters

Strategic Insights

— 1 min read

The Trump administration's decision to impose a 25% tariff on India, along with additional penalties for trade with Russia, has sent shockwaves through the electronics industry. Top exporters like Apple and Samsung fear that losing the manufacturing business to the US would be catastrophic, with industry officials warning that companies may divert production to non-US markets. India's emergence as the biggest exporter of iPhones to the US in the second quarter of 2025, surpassing China, now hangs in the balance.

Key Takeaways:

  • The Trump administration has imposed a 25% tariff on India, which could potentially lose the electronics manufacturing business to the US.
  • Industry officials fear that companies like Apple and Samsung will divert production to non-US markets, including Europe and Asia, if the tariffs persist.
  • Apple's plans to expand iPhone manufacturing capacity in India may be reviewed in light of the tariffs.
  • The 25% tariff rate is higher than that of peers like Vietnam, Indonesia, and the Philippines, which could negatively impact India's full-year GDP growth estimate by 20 basis points.
  • Samsung, which has massive manufacturing operations in Vietnam, is likely to reassess its production strategy in light of the tariffs.
  • Industry officials are pinning their hopes on the ongoing bilateral trade talks between the US and India.

Statistics:

  • India's contribution to the US iPhone market share rose to 44% in the second quarter of 2025, surpassing China's 25% share (Canalys).
  • China's share of the US iPhone market dropped to 25% from 61% in the same quarter last year (Canalys).
  • The US administration has exempted exports of smartphones and other electronics containing semiconductors from China from high levies, taxing them at around 20% (industry officials).
  • India's electronics exports to China fell by 10% in 2025 due to rising competition in the global market (industry officials).

Sources:

  • "US readies 25% tariff on India, plus penalty for Russia trade", Pankaj Doval, TOI, date not specified
  • Canalys, "Smartphone Country Share: USA Q2 2025", date not specified
  • TOI, date not specified, "Industry officials fear US tariffs will hurt iPhone exports from India"
  • Elara Capital, press release, date not specified, "USDINR: Time to take the Bern Watch Off"
  • TOI, date not specified, "Samsung to reassess production plans due to US tariffs"

Read more