US Election Could Shift Global Electronics Manufacturing to India

ENA Sectors 2024-09-23 17:44:51 New Delhi, Sep 23 (KNN) As the US presidential election approaches, Indias electronics manufacturers are closely monitoring the outcome, particularly for its implications on the ongoing US-China trade war. The potential for stricter tariffs on Chinese imports is a hot topic, with many in the industry quietly hoping for the return of Donald Trump to the White House. His campaign promise to extend the 25 per cent anti-dumping tariffs to currently exempted goods, such as laptops and smartphones, is seen as a game-changer. These tariffs could drive electronics production away from China, creating opportunities for other manufacturing hubs, including India. A stricter US stance on China could position India as a favorable alternative for electronics manufacturing, alongside Mexico and Vietnam. Industry experts believe that Indias large labor force and favourable government policies would make it an attractive destination for companies looking to shift production. The Indian government is expected to approve a support package later this year aimed at strengthening the domestic ecosystem for electronics components and sub-assemblies. This policy move is likely to further bolster Indias case as a viable alternative to China. Trumps proposal to hike tariffs on Chinese goods to a staggering 60 per cent if re-elected is seen as a significant factor that could accelerate the China Plus One strategy. Even Kamala Harris, Trumps likely opponent, is expected to continue the current tariff regime, which remained unchanged during the Biden administration. Today, China exports USD 50 billion worth of IT hardware. If tariffs are imposed on these products, where will the big players go? Vietnam is already under scrutiny as an extension of China and may not have the capacity to handle this shift. India, with its large opportunities, would be a prime candidate, said an anonymous industry executive. Several Chinese companies are already preparing for this transition. Longcheer, one of Chinas largest original design manufacturers (ODMs), has partnered with Indias Dixon Technologies, bringing critical product design expertise to the table. Similarly, Huaqin, Chinas leading ODM, is in talks with Micromax parent Bhagwati Products to establish a presence in India. Apple is also focusing on expanding its manufacturing footprint in India, with production of iPhones expected to rise to 20-25 per cent of its total global output by 2027, according to JP Morgan. While the learning curve and lower economies of scale currently keep margins below those in China, the shift is well underway. The India Electronics and Cellular Association (ICEA) has urged the government to engage with the US on products still exempt from tariffs. This move could further boost India's role in the global electronics supply chain, as its share of US imports continues to rise, reaching 2 per cent in 2023 from just 0.3 per cent in 2018. (KNN Bureau) 39382 https://knnindia.co.in/news/newsdetails/sectors/us-election-could-shift-global-electronics-manufacturing-to-india 2024-09-23 17:44:51 knnindia.co.in US Election Could Shift Global Electronics Manufacturing to India