The threat of reciprocal tariffs by the Trump administration has led India's Electronics and IT Ministry to engage in discussions with the Commerce Ministry regarding India's 15-16% duty levy on smartphones. One possible resolution is reducing the duty to zero for the US. In the latest budget, most electronic item duties were reduced to zero, and officials believe remaining levies should be addressed. The Ministry of Electronics and IT (Meity) is actively working with the Commerce Ministry to resolve the issue, while an inter-ministerial committee is studying the impact of such measures.
The electronics industry has recommended eliminating the duty on smartphones, white goods, and other electronic items imported from the US. Pankaj Mohindroo, chairman of the India Cellular & Electronics Association (ICEA), emphasized that the US market is crucial for India's manufacturing and export aspirations. He noted that a structured bilateral trade agreement (BTA) could increase India's electronics exports from $10 billion to $80 billion by 2030. Currently, India levies a 15% basic customs duty (BCD) on smartphones and 20% on hearables, wearables, and consumer electronics, with an additional 10% surcharge.
The ICEA warned that if the US imposes reciprocal tariffs on Indian smartphones—already subject to a 16.5% duty—China could gain a more favorable position. As of FY23-24, 93% of India's electronics exports to the US entered at 0% BCD, while only 35% of US electronics imports to India enjoyed the same. The ICEA cautioned that failing to address these tariff concerns could significantly impact India's electronics manufacturing ambitions and shift global value chains (GVCs) to more favorable destinations