India fails to cash in on US’ 25% duty on Chinese electronics imports

Unlike competing nations such as Vietnam, Malaysia and Mexico, India has failed to push electronics exports to the US by exploiting the latter’s imposition of a punitive 25 per cent duty on key Chinese electronics imports from 2018.

As China saw its electronics exports fall by $29 billion in the last four years as a direct result, the punitive duty created an opportunity for other countries to replace China in the US. Yet, according to a note presented to the government by the Indian Cellular Electronic Association (ICEA), India’s electronics exports to the US in absolute terms went up by a mere $3.2 billion between 2018, when they stood at $1.3 billion, to $4.5 billion in 2022.

In contrast, Vietnam experienced a surge in exports in absolute terms of $39. 3 billion in the same period. The increase for Malaysia was $7.9 billion and for Mexico $20.4 billion. If Taiwan is added, its electronic exports also went up by $30.5 billion in these four years.

India’s failure to grab the opportunity is reflected in the fact that its share of US electronics imports was an abysmal 0.8 per cent in 2022.

The ICEA says that while the increase of electronics exports to the US was 350 per cent, it is insignificant in terms of absolute numbers when compared with competing countries. The ICEA’s assessment is significant, coming as it does when a three-day India-US Cooperation on Information and Communications Technology Dialogues is being organised by the two governments, to be held from May 15 in Washington and New York. The dialogues will include over 40 US companies to discuss business opportunities between the two countries.

The ICEA has told the Ministry of Electronics and Information Technology and the Department of Telecommunications that the strained relationship between the US and China provides India with a golden opportunity to promote Indian businesses in the US.

Based on an analysis of the duties imposed on certain Chinese items, the ICEA has identified the key electronic products where India should take a lead, given its manufacturing and exporting capabilities. These include flat panel TVs, set top boxes which have communications functions, wireless communication apparatus and lamps with glass envelopes which are used mostly for cystoscopes and other surgical instruments.

The ICEA is pushing the government to give these items a special focus and wants detailed discussions to work out how to ramp up exports to America.

However, it has to accept the fact that America’s hefty duty on Chinese products exempts smart phones, laptops, tablets, wireless battery chargers for mobile phones, and USB cables, among others. Business Standard