The proposed 25% tariff by the United States on semiconductors is unlikely to have a major impact on India, as the country is not a major exporter of semiconductors to the US.
India Electronics and Semiconductor Association (IESA) in a statement also highlighted that India’s import duty on semiconductors is already zero, and there are no concerns for reciprocal tariffs.
The association also noted that most of India’s upcoming semiconductor manufacturing and outsourced semiconductor assembly and test (OSAT) facilities cater to global brands. Further, the rising demand for semiconductors is likely to be met by domestically manufactured chips.
“In the long run, Indian semiconductor brands will not be at a major disadvantage, as the US tariff is expected to apply uniformly to all exporting nations,” the statement said.
However, this proposal at the global level is likely to result in higher costs, supply chain disruptions, and an increase in geopolitical tensions.
IESA said the 25% tariff will significantly increase the cost of semiconductors imported into the US, particularly from Taiwan, South Korea, and China, which dominate global chip manufacturing.
This potential price increase is likely to be passed onto the consumer, making it more expensive to buy products like smartphones, laptops, electric vehicles, etc.
According to IESA, the presence of global semiconductor manufacturing companies like the Taiwan-headquartered TSMC and South Korea’s Samsung is likely to strain the relations with the US.
“Other nations may strengthen their semiconductor trade relationships to counterbalance US tariffs. This could lead to closer semiconductor collaboration between Europe and Asia, ensuring steady semiconductor supply chains independent of the US,” the statement said.
