India's electronics industry sounds alarm over increased manufacturing competition from Saudi Arabia, UAE

electronics

India's electronics industry has raised alarms about the growing manufacturing competition from countries like Saudi Arabia and the UAE, warning that these nations' emerging manufacturing sectors could pose significant threats to India's exports.

The industry, represented by the India Cellular and Electronics Association (ICEA), has called for closer government attention to these risks and recommended diplomatic negotiations rather than imposing reciprocal tariffs.

Several developing countries that have secured notably lower tariff rates compared to India, including Brazil, Turkey, Saudi Arabia, UAE (each at 10%), and the Philippines (17%). India Cellular and Electronics Association said that Saudi Arabia and the UAE represent near-term threats to India’s electronics exports due to their SEZs, competitive manufacturing environments and potential labour-cost advantages.

Despite historical trade barriers, Brazil’s favourable tariff treatment adds to strategic ambiguity and warrants careful monitoring.

The India Cellular and Electronics Association of India (ICEA) represents leading mobile manufacturers in India, including Apple, Dixon, Motorola, Xiaomi, Lava, Foxconn, Flex, and others.

"ICEA strongly recommends continued intensive negotiations, closely aligning industry
and government interests to proactively utilize provisions within the U.S. Executive Order
(particularly Section 4(c))....given provisions in the Executive Order that permit the U.S. to escalate tariffs in response to retaliation further (Section 4(b)), ICEA advises against reciprocal tariff measures, emphasizing diplomacy and negotiation instead," ICEA said in a statement.

The U.S. administration's 27% reciprocal tariff announcement comes after substantial recent progress in bilateral trade discussions with India.

While India's reciprocal tariff rate of 27% demonstrates effective diplomatic efforts and proactive negotiation by Indian officials, ICEA said there remains scope for further tariff reduction through continued strategic engagement.