New Delhi, March 6
As reciprocal tariffs by the US administration are likely to be implemented from April 2, industry leaders on Thursday said they are optimistic that a well-structured Bilateral Trade Agreement (BTA) between two partners who trust each other will be hammered out for the electronics sector.
India currently imposes a 16.5 per cent basic customs duty (BCD) and surcharge on smartphones and electronics from the US.
The country is also building a strong domestic manufacturing ecosystem by focusing on four interconnected pillars: infrastructure for a solid foundation, technology for modernisation, skill development for a capable workforce, and market access to drive demand and growth.
According to India Cellular and Electronics Association (ICEA) Chairman Pankaj Mohindroo, offering reciprocal zero duty in the potential BTA for smartphones, hearables and wearables, colour televisions, consumer electronics and appliances and lighting, etc. "is not an extraordinary step for us since we already provide that treatment to FTAs with Japan, Korea and ASEAN (Vietnam, Thailand, Indonesia etc.)".
"The long-term impact of a cautiously optimistic outlook is the ballooning of our electronics exports to the US from the current level of $10 billion to $80 billion, an 800 per cent growth by 2030," Mohindroo told IANS.
Meanwhile, the country is unlikely to experience any major short-term consequences due to the US tariff on semiconductors, as it is not a major exporter of chips to Washington.
India's import duty on semiconductors is already zero, meaning there are no reciprocal tariff concerns, according to India Electronics and Semiconductor Association (IESA) President Ashok Chandak.
Most of India's upcoming semiconductor manufacturing and Outsourced Semiconductor Assembly and Test (OSAT) facilities cater to global brands. India's increasing domestic semiconductor demand will rely on locally manufactured chips, minimising reliance on imports.
In the long run, Indian semiconductor brands will not be at a major disadvantage, as the US tariff is expected to apply uniformly to all exporting nations, said Chandak.
- IANS