India may grant tariff sops for smartphones from US, EU via FTAs

Prime Minister Narendra Modi and US President Donald Trump

India is open to granting tariff concessions on smartphones to non-producing nations such as the US and the European Union (EU) through the proposed trade deals with them, a senior government official said.

India barely imports smartphones from either EU or the US, and lowering or eliminating tariffs on this product comes with minimal risks since these countries aren't direct competitors.

“We will not open smartphones for Vietnam because they are a producer, but we may for the US or Europe, because they can’t really impact India’s production since they don’t make that product,” this official added.

Tariff concessions on import of US smartphones would help protect the sector from any unpredictable trade policies by President Donald Trump’s administration in the future, while with the EU, it will help settle a long-pending dispute at the WTO.

The EU initiated a dispute settlement case in 2019 against steep Indian custom duties on information and communication technology (ICT) goods, including mobile phones, terming it a breach of WTO norms. In April 2023, the ruling upheld Europe’s claim, following which India decided to settle the stalemate through bilateral talks.

Smartphones from the US currently face a 16.5-percent basic customs duty (BCD) along with a surcharge and those from the EU are subject to a levy of up to 20 percent.

“If we give tariff concessions via FTAs (Free Trade Agreements) to non-producing nations, it will only help lower costs for Indian consumers,” the official added.

In March, the Indian Cellular and Electronics Association of India (ICEA), which represents Apple, Foxconn, Dixon, and other top handset makers urged the Commerce Ministry to eliminate tariffs on imports from the US for smartphones, telecom equipment, wearables, and consumer electronics since America is not a direct manufacturing competitor in these categories.

In the letter, the ICEA said that zero duty will help local industry pursue the target of $50 billion in smartphone exports and $80 billion in overall electronics exports to the US, which aligns with India’s broader goal of $500 billion in electronics production.

India’s smartphone exports jumped by 55 percent to $24.14 billion in 2024-25, with the US emerging as the top buyer.

The US has spared certain electronic products such as smartphones from steeper reciprocal duties, including from the baseline 10-percent tariff. Trump’s country-specific levies have been paused until early July.

While India is looking to finalise a mini deal with the US by July 8, a scaled-down version of the first phase of the Bilateral Trade Agreement, an early harvest deal is likely to be concluded with the EU by July too before brokering a larger pact.