Impact of Proposed Trump Tariffs on Indian Semiconductor Industry U.S. President Donald Trump on Sunday said he plans to announce new tariffs on semiconductors within the coming week, generating a wave a panic among global market.

U.S. President Donald Trump on Sunday said he plans to announce new tariffs on semiconductors within the coming week, generating a wave a panic among global market.

"The tariffs will be implemented in the near future," said Trump, referring to the proposed semiconductor-specific measures, which would follow earlier tariffs on steel, aluminum, and automobiles. When asked about the specific rate for semiconductors, he responded, "I'll be announcing it over the week."

"As far as India is concerned, semiconductors are excluded from the reciprocal tariff system that came into effect on April 2. This is a positive development for us, as our semiconductor journey is still in its early stages. Any global trade disruption at this point could have had serious consequences," said Faisal Kawoosa, co-founder of Techarc, a tech-based market research firm.

While India's semiconductor industry is steadily expanding, a recent report by Jefferies points to challenges: an underdeveloped supply chain, a shortage of skilled manufacturing talent, intense global competition, and the pressure to keep pace with rapidly evolving technologies. According to Kawoosa, this is a critical time for India to shift from providing semiconductor-related services to becoming a product-exporting nation.

"At present, India plays a major role in semiconductor design through offshore design centers. These are either owned by global giants like Intel, Texas Instruments, Qualcomm, and MediaTek, or operated as third-party firms offering design and verification services to clients in the US and other markets," Kawoosa explained. "However, with the government now focusing on deepening India's role, we've begun engaging in ATMP (Assembly, Testing, Marking & Packaging) operations. I'm optimistic that we'll see the first wave of exports from India begin as early as this year," he said.

According to a news report. Dr. Aparna Sharma of India Technology Policy Fellow at Pacific Forum stated that India's direct semiconductor exports to the US are negligible (0.0 per cent), and therefore, direct semiconductor chip exports will not suffer much.

According to a report by financial services firm UBS, leading tech companies are actively reassessing their supply chain strategies in light of ongoing tariff uncertainties. The report notes that several firms have already begun implementing a "China plus one" approach, shifting parts of their final assembly operations to countries outside China.

While the unpredictable imposition and rollback of tariffs has sent shockwaves through global stock markets, one potential upside for Indian market is the weakening competitiveness of China, which currently faces a steep 145 per cent duty on exports to the US. The tariff is expected to make Chinese and other major semiconductor suppliers to the US less attractive, encouraging companies to diversify their supply chains and explore India as a promising alternative.

According to the Jefferies report, India has taken steps to attract investments by offering large incentives, which have helped initiate semiconductor manufacturing projects. The success of India's semiconductor industry, however, will depend on securing long-term demand for chips, both domestically and in export markets, the report had stated.

On Wednesday (April 9), Trump announced a steep increase in tariffs on Chinese goods, raising them to 145 per cent, while simultaneously implementing a 90-day pause on duties for imports from dozens of other countries, including India. In a retaliatory move, China responded by hiking tariffs on U.S. imports to 125 per cent on Friday (April 11).

Kunal Chaudhary, Tax Partner, EY India, said the 90-day pause in U.S. reciprocal tariffs offers India a critical window to strengthen its position in global electronics manufacturing. With a steep tariff now applied to Chinese electronics, India's exports become significantly more competitive in the U.S. market. This could drive global companies to ramp up manufacturing in India. As supply chains diversify away from China, India has a real chance to scale its exports and attract long-term investment in electronics and component manufacturing.