Indian telecom gear makers warn that the US’ 26 percent tariff on Indian goods will increase manufacturing costs, disrupt supply chains, and create uncertainty for businesses. They have called for negotiations to safeguard the country’s telecom sector and ensure its sustained growth.
As the telecom infrastructure relies on a complex web of components, many of which are exported, the tariffs announced by US President Donald Trump will increase operational expenses and reduce the competitiveness of Indian firms, said Konark Trivedi, founder and managing director of Frog Cellsat, a manufacturer of RF (radio frequency) equipment.
Noida-based Frog Cellsat is exploring exporting telecom equipment to the US, Europe and Africa.
Trump’s tariffs would be a big cost barrier for Indian hardware exports to the US, Paritosh Prajapati, CEO of broadband equipment maker GX Group, said.
Trivedi said this policy shift may impact short-term growth but it reinforces the importance of self-reliance and strategic expansion into regions that offer more favourable trade environments.
“As the next steps. Policymakers and industry leaders must engage in dialogue to ensure that the Indian telecom sector continues to thrive despite this external pressure,” he said.
Also read: India’s reciprocal tariff set at 26% as US clarifies rate confusion
HFCL managing director Mahendra Nahata said while the tariff challenges cost structures, it will push telecom companies to redefine their role in the global supply-chain.
“Instead of just assembling components, we must embed higher value — designing AI-driven solutions, patenting energy-efficient technologies, and exporting finished innovations aligned with global priorities like climate resilience,” he said.
India imposes a 10-20 percent basic customs duty (BCD) and a 10 percent surcharge on imports of telecom products from the US.
In FY24, India imported $700 million worth of telecom equipment such as routers and switches from the US. For the April-November 2024, the figure was $464 million.
In March, electronics and telecom gear makers urged the government to eliminate tariffs on telecom equipment imports from the US. They said these telecom products were at zero duty from ASEAN countries, Korea and Japan.
“It would be advisable to bring this duty from the US to zero percent also,” the India Cellular and Electronics Association of India (ICEA) said in a letter to Sunil Barthwal, commerce secretary.
Also read: Why stock markets are crashing. Understanding Trump's tariff policy and impact
Indian companies such as Tejas Networks, TCS, HFCL and VVDN, have excellent prospects in the US, an estimated $50 billion market for these products. “While we are currently exporting around $150 million per annum, we can do far better and should aim for exports of $5 billion a year,” ICEA said.
Nahata said the telecom sector could pivot to manufacturing advanced green infrastructure (e.g., solar-powered 5G radios or wi-Fi solutions) or AI-optimised network tools that directly support US decarbonisation and tech leadership goals.
“If we position India as a partner in solving global challenges, sector-specific tariff relief could follow, rewarding innovation over arbitrage,” he said.
The tariff challenges offered Indian manufacturers an opportunity to strengthen domestic supply chains, invest in R&D, and explore alternative markets, Trivedi said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
