ICEA acknowledges US reciprocal tariffs; highlights strategic opportunities for India

The India Cellular and Electronics Association (ICEA) has acknowledged the recent announcement by US President Donald Trump regarding reciprocal tariffs on imports from trading partners, including India. Under the executive order, a baseline additional ad valorem duty of 10% will take effect on 5th  April, 2025 escalating to a country-specific duty of 27% for India from 9th April, 2025.

Despite these additional tariffs, India remains competitively positioned compared to key electronics-exporting nations such as China, Vietnam, Thailand, and Indonesia. While India faces a 27% tariff, China’s cumulative tariffs including previous trade actions range from 54% to 154%, while Vietnam is subject to a 46% tariff. Although Brazil and Egypt benefit from a lower 10% tariff, India retains a significant near-term advantage in export competitiveness.

Commenting on these developments, ICEA Chairman Pankaj Mohindroo stated, "India’s placement in the first round of reciprocal tariff announcements underscores the relentless efforts of our negotiators and leadership. Our comparatively favorable positioning relative to major electronics-exporting nations, particularly China and Vietnam, presents a crucial opportunity that we must capitalize on immediately. However, the real long-term inflection point for India's electronics trade with the U.S. lies in the swift and successful conclusion of a comprehensive Bilateral Trade Agreement (BTA)."

In the last fiscal year (FY 2023–24), India exported electronics worth USD 10 billion to the United States, marking a significant milestone in bilateral trade. ICEA projects the potential to expand this figure to USD 80 billion annually across various electronics product categories, provided there is sustained policy support and a conducive tariff regime. This growth could push total bilateral trade beyond USD 100 billion.

Reflecting on recent bilateral engagements, Mohindroo highlighted the ambitious "Mission 500" initiative, which aims to more than double bilateral trade to USD 500 billion by 2030. He emphasized, "the urgency of concluding the BTA cannot be overstated. Securing stable market access, tariff predictability, and deeper supply chain integration for our electronics industry is paramount. A successfully negotiated agreement could unlock a USD 100 billion electronics trade opportunity, significantly enhancing India’s role in global electronics manufacturing and trade."

US President Donald Trump last month aimed at India for its high tariffs, indicating that trade deal negotiations might not provide concessions to New Delhi on comprehensive levies like reciprocal tariffs, which were scheduled to be effective from 2nd April, 2025. He specifically mentioned the auto industry, where he said India imposes tariffs of more than a 100 per cent.Trump denounced the hefty tariffs levied by India and other nations as "very unfair" and had declared retaliatory tariffs from 2nd April on countries imposing tariffs on US products.

Speaking to a Joint Session of the US Congress, Trump said,"India taxes us at 100 percent tariffs; the system is unfair to the US, it never was. Reciprocal tariffs go into effect on 2nd April . Whatever they tax us, we will tax them. If they apply non-monetary tariffs to bar us from their market, then we will apply non-monetary barriers to bar them from our market." It was his first speech of his second term in the White House. On 20th January, 2025 Trump took the oath as the 47th US President. 

ICEA’s strategic focus amid evolving trade dynamics

ICEA is conducting a comprehensive evaluation of the implications of these reciprocal tariffs, identifying opportunities arising from the new US tariff environment. India remains committed to strengthening its Comprehensive Global Strategic Partnership with the United States, reinforced by the India-US "Catalysing Opportunities for Military Partnership, Accelerated Commerce & Technology" (COMPACT) framework.

ICEA is confident that robust collaboration under COMPACT, coupled with the swift finalization of a multi-sectoral Bilateral Trade Agreement, will ensure that India-US trade relations continue to drive mutual prosperity and transformative economic growth. The association stands ready to actively engage with policymakers, offering industry insights and support to navigate and capitalize on these evolving trade dynamics effectively.