Trump tariff could aid India electronics exports, says Nomura – Here’s what can work in our favour

Trump tariff could aid India electronics exports, says Nomura – Here’s what can work in our favour

  • 23.03.2025 13:46
  • financialexpress.com
  • Keywords: Trump Tariff, Electronics Exports

Nomura suggests Trump's tariffs may boost India's electronics exports, particularly smartphones. Lower import duties and reciprocal trade policies could position India as a competitive hub for global production, benefiting companies like Samsung and Apple.

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Estimated market influence

Nomura

Nomura

Positivesentiment_satisfied
Analyst rating: Neutral

Nomura's analysis suggests that Trump's tariffs could aid India's electronics exports.

Samsung

Positivesentiment_satisfied
Analyst rating: N/A

Samsung is leveraging the opportunity to source more from India, contributing positively to their global production.

Apple

Apple

Positivesentiment_satisfied
Analyst rating: Buy

Apple is sourcing a significant portion of its global production from India, benefiting from the tariffs.

Motorola

Motorola

Positivesentiment_satisfied
Analyst rating: Buy

Motorola is leveraging the opportunity to source more from India, contributing positively to their global production.

Google

Positivesentiment_satisfied
Analyst rating: N/A

Google is leveraging the opportunity to source more from India, contributing positively to their global production.

Dixon Technologies (DIXON IN)

Positivesentiment_satisfied
Analyst rating: N/A

The report expects Dixon to be a key beneficiary of increased exports due to Trump's tariffs.

Samir控股集团 (SAMIL (MOTHERSO IN))

Positivesentiment_satisfied
Analyst rating: N/A

The report expects SAMIL to be a key beneficiary of increased exports due to Trump's tariffs.

Context

Analysis of Trump Tariff Impact on India's Electronics Exports

Key Insights and Market Implications

1. Nomura’s Predictions

  • Impact of Trump Tariffs: The US government's imposition of tariffs could inadvertently benefit India's electronics exports, according to Nomura.
  • Export Growth Projection: Nomura predicts that India's smartphone exports could reach ~$20 billion by FY25F, potentially rising to ~$70 billion by FY30F if global sourcing shifts 30-35% to India.

2. India’s Strategic Moves

  • Import Duty Rationalization: India has been reducing import duties over the past years, with specific cuts in the Union Budget 2025-26 for phone components and TV panels.
  • Low Assembly Shift Risk: Due to low value-added nature of smartphone assembly, labor cost disparities, and USD strength, there’s limited risk of production shifting to the US.

3. Current Export Landscape

  • Export Growth: India's electronics exports to the US surged from ~$2.5 billion in FY20 to ~$11 billion in FY24, with Apple contributing around 50% of this growth.
  • Competitive Advantage: Tariffs on Chinese and Vietnamese products (unlike past exemptions) enhance India's competitiveness in the US market.

4. Key Players and beneficiaries

  • Leading Companies: Major players like Samsung, Apple, Motorola, and Google are already leveraging India’s manufacturing capabilities.
    • Samsung: Sourcing ~23% of global production from India in FY25.
    • Apple: Sourcing ~15% of global production from India in FY25.
  • Expected Beneficiaries: Dixon (DIXON IN) and SAMIL (MOTHERSO IN) are poised to gain significantly.

5. Market Dynamics

  • Shift in Global Sourcing: The report highlights a potential long-term shift in global electronics manufacturing toward India, driven by favorable policies and market access.
  • Long-Term Effects: sustained ramp-up of smartphone exports from India could redefine the country’s role in the global electronics supply chain.

6. Regulatory and Strategic Considerations

  • Reciprocal Tariffs: The US government's push for reciprocal tariffs on Indian goods, while initially seen as a challenge, may indirectly boost India’s export opportunities.
  • Strategic Sourcing Decisions: Companies are likely to reevaluate their global supply chains, with India emerging as a preferred manufacturing hub due to cost efficiencies and policy support.

7. Competitive Dynamics

  • Impact on China and Vietnam: Tariffs on these regions make India a more attractive alternative for electronics manufacturers.
  • Labor Costs and Currency Factors: India’s lower labor costs and strengthening USD provide a competitive edge over the US for low-value-added products like smartphones.

8. Conclusion

  • India’s Positioning: The combination of reduced import duties, strategic policy changes, and global tariff dynamics positions India as a key player in the electronics export market.
  • Future Outlook: With sustained growth projections, India is well-positioned to capitalize on shifting global trade dynamics and enhance its share in the US electronics market.