US reciprocal tariffs may hit exports of India-made iPhones, auto parts

NEW DELHI: Apple might be one of the most important losers in case the Trump administration decides to slap reciprocal tariffs on import of electronics and smartphones from India because the transfer may put a spanner in its rising manufacturing investments right here.
The scenario is equally grave for auto part makers, who ship parts price billions of {dollars} to the US – estimated at round $7 billion for this fiscal towards $1.4 billion price of American imports – and thus run the chance of shedding enterprise in case the US will increase tariffs on merchandise popping out of India, an evaluation carried out by TOI exhibits.
Apple presently is one of the most important exporters of digital items from India because it ships iPhones to world markets, with the bulk of them flowing into China. Estimates put the shipments to the US at near $8-9 billion this monetary 12 months itself with the corporate more and more utilizing its India factories to supply massively for the American market. The India merchandise attain the US with zero responsibility, making it a worthwhile deal for the corporate.

Apple’s exports estimated at $9 billion

However, what’s bothering the brand new US administration underneath Trump is the 16.5% responsibility that New Delhi costs on telephones and different electronics merchandise when they’re imported to India. “The fear of the industry is that if Trump really goes ahead and slaps a reciprocal duty of 16.5% on smartphones and electronics products being shipped out of India, it will immediately reverse the maths against our manufacturing strength,” a key vendor within the ecosystem mentioned.
While a current determination of the Trump administration to slap a ten% responsibility on Chinese electronics imports is nice information for Indian manufacturing, the scenario will fully change if India is introduced underneath a 16.5% import responsibility regime in America. “That would mean our manufacturing will become more expensive than China due to the higher duty. So, Apple will really have no benefit of making in India, and would rather find it beneficial to ship its products out of China at 10% duty,” one other vendor mentioned.
And it is not simply Apple – Samsung can also be transport its India-made units to the US, and so is Motorola. “The whole business case for export of smartphones to the US will get disrupted,” the seller mentioned.
On the entrance of auto elements, the scenario is equally tense. “While we send our parts to the US at a duty of around 1-2% – it’ss zero for many items – India imposes duty across multiple slabs for the components coming from the US. The actual duty ranges between 7.5% and 15%,” a part maker mentioned.
The solely saving grace that Indian makers see is the truth that the share of Indian elements within the US is minuscule in comparison with what it buys globally. “We are just about $7 billion to the overall $300-billion worth of component imports that the US carries out,” the auto vendor mentioned.