New Delhi: Tariff exemptions, announced heading into the weekend past, are off. US President Donald Trump, earlier today, confirmed in a Truth Social post that there is no tariff exemption. No one’s “off the hook”, to be precise; and that they are “taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations”. That could be as early as next week — for now, semiconductors, computers and smartphones from China will still be subject temporarily to a 20% tariff (the base tariff is 10%) instead of a broader umbrella of 145% tariffs on Chinese goods.
There may be little scope of understanding any long-term direction, considering Trump’s dynamic propensity (witnessed again, in the early hours of today) to move goalposts. The administration’s focus, as US commerce secretary Howard Lutnick said in a media statement, points to an urgent “need to have these things made in America.” (He mentioned semiconductors, chips and flat panel displays, to illustrate his point). The narrative and specifics may again change, in the coming days. Nevertheless, a few questions do need answering — quite what does this mean for the country’s trade with China, any possible realignment for big tech companies, and indeed what’s at stake for India?
Prabhu Ram, head for the industry intelligence group at Cyber Media Research said the tariff structuring, as it stands, will provide much-needed relief for the global technology sector, easing pressure across consumer electronics, semiconductors, and hardware.
“Especially Apple, which was caught in the crossfire—as well as the broader chip and hardware industries. The exclusion of smartphones and chips is particularly critical in the context of China tariffs. While it addresses near-term concerns, long-term uncertainty around US-China trade dynamics remains,” Ram said.
For India, there are opportunities now just owing to the strengths as a large consumer base owing to a large population, but also manufacturing, up-skilling for critical manufacturing tasks and strengthening its play within the global supply chain. Crucial to this will be the expected India-US trade deal, something that has gained urgency in recent weeks.
Linda Sui, senior director of Global Smartphone Strategies at research firm TechInsights said India and Brazil, to name a few countries, must see this as an opportunity.
“We believe the iPhone manufacturing shift from China toward India will continue and accelerate regardless of the exemption. In 2024, India roughly manufactured 13%- 14% of global iPhones and we expect the ratio will double or even be higher this year,” said Sui.
There is already movement in that regard. In March, the Indian government announced significantly increased budget allocations for key sectors under the Performance-Linked Incentive (PLI) Scheme in 2025-26; this includes Electronics and IT Hardware which now has an allocation increase from ₹5,777 crore (this was an already revised estimate for 2024-25) to ₹9,000 crore, and Automobiles and Auto Components being earmarked for an increase from ₹346.87 crore to ₹2,818.85 crore.
Apple via Suppliers like Foxconn, Pegatron, and Tata Electronics, has detailed plans to increase manufacturing numbers in India; a barometer for that is exports from India are projected to cross $15 billion in 2025.
Micron Technology’s investments in Gujarat for its assembly, testing, and packaging (ATMP) plant, Tata Electronics’ commitment of $152,000 crore ($18 billion) for India’s first major semiconductor fab in Gujarat’s Dholera for 28nm and above chips, as well as Vedanta Foxconn Semiconductors earmarking $19.5 billion for setting up semiconductor and display glass manufacturing in Gujarat which aims to produce chips and glass for affordable electronics like smartphones, laptops, and EVs, are further examples of tech companies announcing significant manufacturing-focused investments in the country.
In 2024, India became the fourth largest market for Apple, after USA, China, and Japan, as shipments reached a record 12 million units in the country, with 35% YoY growth — iPhone 15 and iPhone 13 were the highest shipped models.
There is expectation that Apple will expand iPhone manufacturing in India, with plans to produce 25% of all iPhones in the country by 2028. While we keep referencing Apple as an example to illustrate India’s momentum to position itself as an important cog in the global supply chain, that trajectory will encompass any and all tech manufacturing and include a much broader array of tech brands across smartphones, computing devices, consumer electronics, televisions and displays, as well as chips.
“India holds the potential to play a pivotal role in areas like ATMP, PCB production, and processing of critical minerals, which are crucial for ensuring semiconductor supply chain stability,” said CMR’s Ram. “With continued focus on building skills, capacities, and robust infrastructure, India could establish itself as a key enabler in the global semiconductor ecosystem,” he adds.
TechInsights’ Sui points to a critical detail in China’s counter-tariffs of 125%, expected to provide some relief to tech companies and a broader negative sentiment in global tech trade.
“China has clarified and specified that the125% tariff on US products is based on the manufacturing location rather than the tech origin country. It means the vast majority of chipsets and components used on iPhones and other smartphones manufactured in China will not be impacted by the counter-tariffs imposed by the Chinese government too, because most of the chipsets and key components used on iPhones and Android smartphones were manufactured out of the USA,” said Sui.
Smartphone makers, for instance, including Apple and Samsung, will draw the few positives that emerge from this trade war. There is little doubt the tariffs and counter-tariffs, will make purchases more expensive for customers, and impact spending or purchasing power.
For the US, there has been a positive trajectory to push investments towards manufacturing within its borders.
In February, Apple announced a $500 billion investment plan spread over the next four years; that includes opening a new server manufacturing facility in Houston, for AI infrastructure, expanding the U.S. Advanced Manufacturing Fund to $10 billion, and creating a training academy in Detroit for workforce development.
Intel is building new chip manufacturing plants in Ohio to enhance domestic semiconductor production — that is a $20 billion investment. Hyundai has announced $20 billion investments, including $5.8 billion for a new steel plant in Louisiana. With $575 million and an additional $186 million for R&D over the next decade promised, GlobalFoundries wants to establish the New York Advanced Packaging and Photonics Center at its Malta facility, enhancing chip production for AI, automotive, aerospace, and defence sectors.
The continued tariff ambiguity, and the costs that come with any tariff imposition, is expected to have an impact on global smartphone shipments through 2025. Researchers at the International Data Corporation (IDC) had, in February, estimated worldwide smartphone shipments are forecast to grow 2.3% year-over-year in 2025; that translates to 1.26 billion units. That estimate was, before the tariff tit-for-tat began. Smartphones aren’t the only tech category expected to register subdued shipments.
