Electronic and handset manufacturers in India have urged the government to step up trade with the US to attract overseas supply chains as American companies look for an alternative to China because of tariff barriers.
They believe India has a significant opportunity to secure these supply chains in the electronics and telecom/networking sectors at a time when Vietnam, Mexico and Taiwan are also looking to attract US companies in the telecom and electronics space.
An Indo-US Task Force for Electronics, created by the Indian Cellular and Electronics Association (ICEA), will meet next month to create a roadmap for increasing electronics trade between India and the US from $12 billion to $100 billion over the next decade.
After the meeting, the task force, chaired by former Trai chairman RS Sharma, will present its recommendations to the Ministry of Electronics and Information Technology (MeitY), the National Security Advisor, the Prime Minister’s Office, and the Department for Promotion of Industry and Internal Trade (DPIIT).
“India's growth in electronics manufacturing presents a crucial opportunity. As global manufacturers seek alternatives to single-market reliance, India must enhance manufacturing standards and align policies to support large-scale production. The time is now — India has a short window to capitalise on the shifting supply chain, with other nations also competing,” Pankaj Mohindroo, chairman of the India Cellular and Electronics Association (ICEA) told Moneycontrol.
The body, which counts Apple, Foxconn, Dixon, Xiaomi, Oppo, Vivo and Lava among its members, is urging the government to engage with the US on key products such as laptops, tablets, smartphones, chargers, lithium-ion batteries, and USB cables.
ICEA suggests that the US government could influence its companies to relocate at least 50 percent of their global production to India, leveraging the strong strategic partnership between the two nations.
“The trade growth demonstrates the robust capabilities and mutual benefits that this partnership harbours. We must leverage the growing strategic partnership between India and the US to position India as a leader in the global electronics sector. This is our moment to seize and establish India as a dominant force in the global market,” Mohindroo said.
Former country head of Foxconn arm Bharat FIH Josh Foulger, a member of the government task force set up to achieve a $300-billion electronics export target by FY26, said, “Outlining an Indo-US cooperation model should be a priority.”
“This co-operation is crucial. The American global value chains are exploring the China+1 option, although significant shifts away from China have not materialised yet. While some operations have moved to Vietnam, there remains a substantial opportunity for India and the US,” said Foulger, president of manufacturing unicorn Zetwerk Electronics.
The electronics trade between India and the US has seen substantial growth since 2018, when the US imposed a 25 percent tariff on Chinese electronics. As per ICEA data accessed by Moneycontrol, the trade increased by more than 260 percent from $3.3 billion in 2018 to $12 billion in 2023.
Foulger added that over the past four decades, India has collaborated extensively with the US on software, making it an opportune time to pivot towards hardware partnerships.
Leading semiconductor companies like Intel, Texas Instruments, and Qualcomm are US-based and represent the full spectrum of the component ecosystem and software platforms like Android and iOS.
“The US offers an unmatched combination of these verticals and horizontals within the industry. Given our software synergy with the US, I believe this relationship is a robust foundation for future advancements. We need to negotiate exclusive agreements with the US to solidify a $200-billion ESDM trade target by 2030,” Foulger added.
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