The recent announcement by U.S. President Donald Trump to impose a 25% tariff on semiconductor imports is poised to reshape the global semiconductor landscape. However, according to the India Electronics and Semiconductor Association (IESA), India is unlikely to face significant short-term repercussions from this policy. This is primarily because India is not a major exporter of semiconductors to the U.S., and the country already maintains a zero import duty on semiconductors, eliminating concerns over reciprocal tariffs.
Ashok Chandak, President of IESA, emphasized that most of India’s forthcoming semiconductor manufacturing and Outsourced Semiconductor Assembly and Test (OSAT) facilities are designed to serve global brands. Additionally, India’s burgeoning domestic semiconductor demand is expected to be met increasingly by locally manufactured chips, further insulating the nation from immediate external policy shifts.
While the immediate impact on India appears minimal, the global semiconductor industry is bracing for significant changes. The imposed tariffs are anticipated to increase the cost of semiconductors imported into the U.S., especially from leading producers like Taiwan, South Korea, and China. These additional costs are likely to be transferred to consumers, resulting in higher prices for electronic devices such as smartphones, laptops, and electric vehicles.
In the long term, as India’s semiconductor industry matures and potentially increases exports, it will need to navigate the evolving global trade environment. For now, India’s strategic focus on bolstering domestic manufacturing and reducing import dependencies positions it favorably amidst these global trade shifts.
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