Advantage India in electronics as Trump pauses tariff, hints at exemptions

Alongside the paused tariff war globally, Trump further said at a press conference on Wednesday that he would “take a look” at the idea of exempting certain US companies from the impact of his import tax duties from nations around the world, including India.

“I’ll take a look at it as time goes by. There are some (companies) that by the nature of their business will get hit a little bit harder, and we’ll take a look at that,” Trump said. When asked if there would be a criteria for any such exemptions, Trump said, “Just instinctively.”

The move plays out well for India and Apple alike, given India’s increasing importance in assembling the company’s single-largest revenue driver, the iPhone.

“Apple’s global supply chain does not work in silos, and as things currently stand, China plays a significant role in its overall manufacturing and supplies. However, an easier stance on tariffs from Trump is sure to assuage concerns among analysts and the company as well in terms of how its cost structure for the iPhone—Apple’s single-largest revenue driver—would get impacted. For now, it seems likely that Apple would be able to find a suitable corner for itself in terms of its business—and not have to drastically increase its prices in what is its largest market,” a senior industry consultant who works across India’s electronics industry said, requesting anonymity.

Apple did not immediately respond to Mint’s request for comment.

Apple’s share price reaction in the US underlines the tariff pause’s impact well. Since 2 April, Apple’s share price has fallen 23% in one week. In Wednesday’s trading hours, however, Apple’s shares surged 15% in a single day, potentially making up for a significant part of its decline over the past week.

Good news for India?

In India, electronics industry consultants and analysts are taking a measured but bullish stance. A senior official directly involved in the electronics industry said, on the condition of anonymity, that India “is not in a rush to make a knee-jerk reaction—even to a potentially positive update”.

“The central government is working across various fronts to formulate a strategy that will bode well for India’s electronics economy. This is not solely based on Apple or the US, even though both of them are important as customers of what India intends to offer. But, of course, there is substance to the fact that Trump’s tariff pause is good news as Apple is the biggest electronics exporter from India, from its electronics manufacturing services (EMS) partners in the country,” the official said.

Earlier on Thursday, Mint reported that India’s latest push to localize electronics component manufacturing aims to double the value of electronics exports from the country. By 2030, India aims to export more than $50 billion in electronics. Apple, and specifically its iPhone, accounts for over 60% of this amount—which is what makes Trump’s latest tariff pause crucial.

As of 2024, Apple exported over $10 billion worth of iPhones from India for its global markets, including the US. Homegrown Tata Electronics Pvt. Ltd and Foxconn’s India joint venture Bharat Foxconn International Holdings Ltd are key suppliers to Apple. Other EMS firms that build electronics to export to the US, as per reports on the EMS sector by Morgan Stanley and Macquarie, include India’s largest contract manufacturer Dixon Technologies (India) Ltd, Syrma SGS Technology Ltd, and Kaynes Technology India Ltd.

Caution, however, remains in the market. Navkendar Singh, associate vice-president at market researcher IDC India, said “the abject uncertainty under Trump’s administration is India’s biggest concern”.

“Even if Trump decides to pull back on tariffs, he may decide the very next day to increase tariffs drastically if he feels unhappy with anything related to India, or any other nation for that matter. It is this uncertainty that will continue to keep Apple and India’s electronics industry on the edge, and things are unlikely to change right away,” Singh said.