New Delhi: US President Donald Trump announcements of mutual tarifts on imports from countries around the world has triggered a sharp division within the leaders and observers of the Indian electronics industry.
Some said that in the long run, India will have no impact on India’s pressure to become a worldwide electronics production center. Others, however, expressed serious concerns about possible failures towards Indian ambitions and suggested that if they maintain Trump’s tariffs, India could lose part of its impulse for countries with smaller taxes such as Brazil.
They said it was particularly important with regard to the growing importance of India as a production center for companies such as Apple, and other technology companies that want to diversify from China potentially in India.
Atul Lall, CEO and CEO of the largest Indian contractual manufacturer Dixon Technologies, said that the main focus of Indian EMS companies (electronic production services) remains the domestic market that is largely unaffected and added that it is too early to measure the full impact on Indian companies.
“But you need to see the companies go back in the US,” Lall said. “The big change will be seen in how US consumers will be operated in terms of access to electronics.” He added that to further understand the long -term impact, it is also necessary to look at the stability of tariffs and individual bilateral contracts, including the ongoing Indian business interviews with the US.
On the other hand, Navkendar Singh, the associated vice -president of IDC India, raised concerns about the uncertainty of policy and potential geopolitical pressures. Singh also emphasized the risk that Apple would reassess expansion in India.
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“There is a bilateral business agreement that is in the works between India and the US, which will certainly affect the electronic industry,” Singh said. He pointed to the risk of geopolitical pressures that Puspes pushes to set up an assembly plant in the US in the long run or at least stop its expansion of India. “Such steps will not only increase the costs and margins for Apple, but also prevent India’s efforts about value chain performance in global production and global electronics supply chain,” Singh said.
Data from the Association of Cell and Electronic Associations of India India India (ICEA) have shown that IPphone phones have been $ 14.5 billion, ie 70% of Indian exports of smartphone since February. Although there is no specific number for US exports, four industrial analysts estimate that at least 15% of the iPhone balanced from India was sent directly to the US – by adding at least $ 600 million in additional tax, which Apple had to pay for imports of the assembled iPhone to the US from India.
Apple spokesman did not respond to Mint’s request about Trump’s Tarifty statement until the press time.
Apple’s story
Apple’s efforts to produce iPhone in India began in February 2017. Since then, the company has increased local production in the country and even uses India as a base for export equipment to the rest of the world, including the US.
According to three market analysts with whom Mint spoke, Apple sold approximately 110-120 million iPhone in the US last year. Since all are made in China, Vietnam, Brazil or India, Apple will have to pay import tariffs from 10% (in Brazil) to 46% (in Vietnam). The analyst’s consensus has suggested that this could lead to additional responsibility for a tariff of up to $ 10 billion per Apple-MS its lowest production taxes is Brazil if they maintain the tariffs.
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Minister of Union It Ashwini Vaishnaw said last week that Apple today has 64 reserved assembly plants for its production efforts in the country. He was privately held by Tata Electronics Private Limited and the largest Chinese contractual manufacturer of FoxConn contracting enterprise in India, are two of Apple’s largest benefactors. Tata Electronics and Foxconn are Apple contracts in India and build up the latest iPhones in the country.
Analysts believe that Trump tariffs will lead to more negotiations around the world with the US that may or may not disrupt the current status quo – where India is a key benefactor of technology companies that want to diversify their production efforts outside China.
Global impact
The head of the analyst in the top brokerage company added and demanded anonymity that slowing in localization could brake the Indian eventual goal of the economy for 2030. The fact is that it is, it’s, it’s, it’s, it’s, it’s, it’s, it’s, it’s, it’s Indian, whether it’s, it’s, it’s, it’s Indian, The Global Supply Chain of EMS -controlled US, ”said the analyst.
The second analyst in the brokerage company added that such a step could also brake Indian value growth. “Right now Apple is one of the largest customers to build electronics in India, followed by Samsung, Xiaomi and the Chinese BBK electronic brand. Although none of them will move production over one fifth to India in the next five years, Apple had a short -term goal for India’s production.”
Negotiating table
However, most of this would depend on whether they maintain current tariffs in the long run.
“What Trump’s tariffs are doing is to bring nations to the discussion table, and it is likely that after six months the tariffs may be drastically different – or perhaps not at all,” said Tarun Pathak, partner and director of Counterpoint.
He added that the Indian electronics production has so far grown to the back of the import substitution opportunities. “In the future, India has the opportunity to satisfy exporting globally and increase the actual generation of local income, which significantly contributes to the GD nation,” Pathak said.
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Pathak added that the tariff war could potentially disrupt this growth to India: “If Asian nations do not come to deposit countermakers in the US or conclude their own bilateral agreements with the US, both moves were on the table right now”.
Risk of indirect exports
Meanwhile, India must remain alert that it will be used as an indirect way to export the route, the parties said.
Ajai Chowdhry, co -founder of HCL Technologies Limited, said that while the impact on China is worse than India according to the current shape of Trump tariffs, this could lead to India’s neighbor for indirect exports.
“We must be vigilant about the landfill of Chinese electronic waste to India and we should perform a high level of concern in the indirect trade war. In no time we do not want to turn into a Chinese business colony,” Chowdhry said.
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