Semiconductor Tariff Impact
US President Trump has imposed a 25 per cent tariff on semiconductor imports, raising costs for US tech firms and causing disruptions in global supply chains. However, experts believe that India will not experience significant immediate effects, as it is not a major semiconductor exporter to the US. Indian companies that export finished electronic goods are taking a cautious approach before making new investments.
The tariff could potentially violate the Information Technology Agreement (ITA-1), which mandates zero duties on semiconductors and IT products among signatory nations, including the US.
The Indian Electronics and Semiconductor Association (IESA) recognizes that such tariffs could have a substantial impact on the global semiconductor sector. However, the immediate effect on India is expected to be minimal. According to IESA President Ashok Chandak, the tariff will influence costs, supply chains, innovation, and geopolitical dynamics in various ways.
On Tuesday, Trump announced his plan to impose tariffs of around 25 per cent on semiconductors, automobiles, and pharmaceutical imports as part of his US-first trade policy.
Despite this move, India’s short-term impact is expected to be minimal, as it is not a primary semiconductor exporter to the US. Additionally, with India’s import duty on semiconductors already set at zero, there are no reciprocal tariff-related concerns.
In summary, while Trump’s semiconductor tariffs will disrupt global supply chains, India is likely to face minimal immediate impacts.
