Tariffs Are Coming… Or Maybe Not.
The U.S. just hit pause. For now.
There’s a 90-day window before steep new reciprocal tariffs kick in on electronics-everything from smartphones and laptops to chips and batteries.
On paper, the duties look brutal: a baseline 10% tariff on all imports, with additional country-specific tariffs. China has been hit hardest , with tariffs potentially reaching up to 125% on certain electronics, including smartphones and semiconductors. And in case you missed it, in case of China, there’s no tariff pause.
Even as I was writing this, Trump announced some more exemptions to the reciprocal tariffs list. Now, smart phones, computers, and other electronics are, atleast for now, are not going to be hit with reciprocal tariffs.
This comes as a big relief to those importing smart phones into the US. Yes, think Apple.
But both you and me know that Trump at best is an unreliable quantity. And while a less harsh version of the overall reciprocal tariffs could ultimately become reality, the big question is how does it play out with China.
When it comes to China, there’s a lot more at stake than just the trade deficit. The US is bent on destroying China’s dominance across industries. China on the other hand, is not willing to bow down.
So, let’s game out a scenario where China ultimately ends up with a higher across the board reciprocal tariffs being levied on its exports as compared to say India, and Brazil.
If Tariffs Are Imposed Permanently…
Let’s start with the obvious: China’s electronics exports will take a hit. That’s by design. What happens after that is less clear.
India, for instance, is sitting at a 26% tariff-less than China, more than Brazil. That may not sound like much-but in a low-margin, high-volume industry like smartphones, every percentage point counts.
Yes, India’s smartphone exports have surged-from just $3 billion in FY20 to over $24 billion in FY25, according to ICEA, Department of Commerce. A neat sevenfold jump in five years.
Credit where it’s due: the government’s PLI scheme got Apple, Samsung, and Xiaomi to set up shop (or rather, get Foxconn and Wistron to do it for them).
But here’s the catch-nearly 70-80% of a smartphone’s value is still imported. Components like chipsets, displays, camera modules and batteries come from abroad, which means India captures just a fraction of the total value despite the export headline.
That’s what the new PLI for components aims to fix. If India can localise even half of that supply chain, it’s a game-changer-not just for exports, but for margins, resilience, and long-term scale. With trade deals on the table, a push into Africa and Latin America, and growing interest from global tech suppliers, India’s smartphone export play is only getting warmed up. The shift from assembler to full-stack electronics powerhouse? It’s finally in sight.
Add to that improving local sourcing, Apple’s soaring iPhone exports, and a growing list of manufacturers-and suddenly, India starts to look like a real contender. Samsung, Google, and Motorola are already here.
Dixon Technologies, for one, could gain from this churn, thanks to its ties with Motorola, Google, and Nokia. For most other brands though, the work either stays in-house or with players that aren’t listed in India. So, not much for stock market investors to cheer there-at least not yet.
But India is not the only one playing this game.
Brazil, for one, enjoys a flat 10% tariff. And according to Exame, a prominent Brazilian business and economics magazine, Apple is quietly upgrading its São Paulo plant. Until now, it mostly assembled older models for local sale. That’s changing. Production lines are being upgraded. Anatel, Brazil’s telecom regulator, has cleared the iPhone 16-including Pro models-for local assembly.
If Apple decides to export from Brazil to the U.S., India might find itself undercut on price, especially for premium phones.
Vietnam’s not sitting idle either. Reports suggest it’s negotiating a zero-tariff deal with the U.S. If that goes through, India’s 26% looks less like a moat and more like a tax.
If the Tariffs Don’t Go Through…
Which is what seems to have happened, for now.
Nothing changes. Except everything does.
Because this is the second or third “near-miss” on U.S.-China tariffs in the last five years.
Companies now know just how fast the trade map can shift. The message is simple: diversify or die. Even if this round gets dialled back, the structural shift is underway.
India’s smartphone exports were already on an upswing even before tariffs entered the picture. Mobile phone exports crossed ~US$24 billion in FY25, with Apple alone exporting $17 billion USD from India, accounting for over 70% of India’s total smartphone exportsduring that period.
The India Cellular and Electronics Association (ICEA) project exports could cross US$40 billion by 2027, driven by deeper global integration and policy support like the PLI scheme.
While tariffs on smartphones and batteries are drawing attention, semiconductors -the backbone of all electronics-aren’t escaping scrutiny either. In the U.S., chips from China could face stiff new duties, while in India, basic chip imports still hover around the 0-10% range. But that doesn’t mean India has an edge-most chips are still imported. The real game changer would be building local capacity, which is only just beginning.
Micron, AMD, and the Tata Group have committed to building chip fabs or packaging units here. Among Indian-listed plays, Tata Elxsi, Kaynes Technology, and SPEL Semiconductor stand out as potential long-term beneficiaries. As the ecosystem matures, their upside could expand meaningfully.
Bottom Line
The next 90 days are crucial.
For now, smart phones, computers and other electronics will not be hit by tariffs. Thus India’s export push may still continue, but the edge will narrow.
But, on the off chance the talks fail, and reciprocal tariffs are rolled out, India could see a major tailwind-especially if it can stay ahead of Brazil and Vietnam.
Either way, global supply chains are shifting.
And for now, India’s still very much in the race.
By the end of this 90-day window, we’ll know which way the wind blows.
If U.S.-China tensions escalate-or simply drag on-India may not just stay in the race. It might find itself running a few paces ahead.
Disclaimer
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Manvi Aggarwal has been tracking the stock markets for nearly two decades. She spent about eight years as a financial analyst at a value-style fund, managing money for international investors. That’s where she honed her expertise in deep-dive research, looking beyond the obvious to spot value where others didn’t. Now, she brings that same sharp eye to uncovering overlooked and misunderstood investment opportunities in Indian equities. As a columnist for LiveMint and Equitymaster, she breaks down complex financial trends into actionable insights for investors.