Indian Electronics Sector Buoyant as U.S. Imposes 145% Tariff on Chinese Goods This 90-day pause came as a result of India's calibrated approach to bilateral negotiations. While India opted for diplomatic dialogue, China and the U.S. chose a more confrontational path

With the 90-day pause on the proposed 26 per cent tariffs on Indian imports—announced on April 2—and a steep 125 per cent reciprocal tariff imposed on China just yesterday by U.S. President Donald Trump, India's electronics sector is now looking at an ideal opportunity for investment and manufacturing in the country.

This pause came as a result of India's calibrated approach to bilateral negotiations. While India opted for diplomatic dialogue, China and the U.S. chose a more confrontational path. In response to the initial 106 per cent tariffs, China had vowed to "fight to the end" if the U.S. continued to escalate the trade war. This prompted the Trump administration to raise the tariff to 145 per cent, increasing pressure on Chinese exporters. Further escalating the trade war, the Chinese Commerce Ministry in Beijing said China raised additional tariffs to 125% on imported U.S. products, raising the levies from the previous 84%.

Commenting on the development, a government official said the heightened reciprocal duty on China and vice versa will bode well for India as it will allow the country to become a manufacturing and investment hub.

"The 90-day pause for India will give time to other countries now willing to shift their manufacturing plant out of China, as India will now only have to pay 10 per cent duty on exports. Also, given the fact that the bilateral talks between India and the United States went well the first time, more trade stability in the future is expected, allowing the other players to choose India over China," the official said.

When the tariff imposed by Trump's administration on China was 104 per cent, Nishant Pitti, Founder & Chairman, EaseMyTrip, had said in a X post, "Trump cancels tariffs for most nations, except China, which will be at 104% Sharing the TOP 104 products that China used to export to the US, in comment section. Indian businesses, now is the time to ACT BOLD! If you are one of the manufacturers from this list, find distributors who can help you sell and immediately book a ticket to the US. Go meet these businesses and sell them your best quality product".

Ritesh Goenka, Managing Director, Damson Technologies, said the U.S. always been a key trading partner for India, and the new tariffs will undoubtedly steer the global electronics industry in a new, uncertain direction.

"But uncertainty doesn't always signal a setback. Indian electronics players should recognize that when tariffs rise in competing economies, global investors look for alternative partners. India is well positioned to step in here. As one of the largest consumer electronics markets in Asia-Pacific, India already has the resources, skilled workforce, and operational efficiency required to support large-scale production. The 145% tariff on Chinese exports presents a timely opportunity for us to step and position India as the next global manufacturing hub," said Goenka.

"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. At the same time, this pause creates space for deeper bilateral engagement on trade, especially as India works toward a strategic trade partnership with the U.S. Leveraging this momentum through targeted policy support and faster infrastructure ramp-up could help India cement its role as a reliable global alternative in high-tech manufacturing," said Kunal Chaudhary, Tax Partner, EY India.

It's not just the large corporations—medium and small enterprises too must step up and seize the opportunity emerging from this new geopolitical shift, as two of the world's largest economies lock horns in a trade war.

Faisal Kawoosa, co-founder of Techarc, a market research firm focused on the technology sector, pointed out that India's advantages go beyond tariffs.

"Beyond the tariff advantage, India's real strength lies in its now well-established electronics manufacturing ecosystem. Large EMS (electronics manufacturing services) providers are already present, and local players have strategically collaborated and scaled up their capabilities," he said.

"The Indian government, too, has shown agility in responding to industry needs, enabling businesses to capitalise on this emerging opportunity. Many are leveraging the Production Linked Incentive (PLI) scheme, and there is now a growing focus on component manufacturing as well."

In this context, Kawoosa added, the focus for India is no longer on capability building—it's on capacity building. "That puts us in a far better position," he said.

Navajith Karkera, CEO and Co-founder, Rapture Innovation Labs, an audio technology startup, echoed similar sentiments.

"The recent spike in U.S. tariffs on Chinese electronics is only accelerating a shift that's been in motion for years. Global companies are no longer chasing just the lowest cost—they're seeking reliability, innovation, and diversified manufacturing partners. And India is rising to that challenge," he said.

"With its skilled talent pool, strong engineering capabilities, and rapidly evolving manufacturing ecosystem, India is positioned to lead. India is no longer just 'the back office of the world'—it's becoming a global innovation and manufacturing powerhouse. This is India's moment to build, not just for India, but for the world," said Karkera.

Anurag Sharma, Managing Director of AKAI India -- a consumer electronics brand, said the 145% duties imposed by the US on Chinese electronics exports have altered the global trade landscape, placing India at a clear strategic advantage. This shift goes beyond trade wars or policy adjustments—it highlights India's long-overlooked potential to lead in electronics manufacturing, he said.

"India offers exactly what global markets are now actively seeking: deep engineering talent, rapidly evolving infrastructure, and a strong ambition to innovate and lead on the world stage. However, this window of opportunity won't remain open indefinitely. To truly capitalise on it, India must act quickly—investing in manufacturing capacity, innovation, and a resilient supply chain. For global investors, India represents not just a safe bet, but a smart one," he added.