iNDICA NEWS BUREAU-
India is unlikely to face significant short-term consequences from the U.S. tariff on semiconductors, as it is not a major chip exporter to the U.S., according to the industry body.
Additionally, India’s import duty on semiconductors is already zero, so there are no reciprocal tariff concerns, explained Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA).
Most of India’s upcoming semiconductor manufacturing and Outsourced Semiconductor Assembly and Test (OSAT) facilities are designed to serve global brands. As India’s domestic demand for semiconductors grows, reliance on locally produced chips will reduce the dependence on imports.
In the long term, Indian semiconductor companies are unlikely to face a major disadvantage, as the U.S. tariff is expected to be applied uniformly to all exporting countries, said Chandak.
The imposition of a 25% or higher tariff on semiconductors by the Donald Trump administration is anticipated to have substantial global consequences for the semiconductor industry. This move will affect costs, supply chains, innovation, and geopolitical dynamics, shaping the future of the sector.
The 25% tariff will notably increase the cost of semiconductors imported into the U.S., especially from Taiwan, South Korea, and China, which dominate global chip production. These added costs are likely to be passed on to consumers, resulting in higher prices for smartphones, laptops, electric vehicles, and industrial electronics.
Companies reliant on semiconductor imports, such as Apple, Nvidia, and Tesla, may face higher production costs, potentially leading to reduced profit margins or higher consumer prices, according to the IESA.
In response, companies may diversify their supply chains by sourcing chips from tariff-free regions or increasing domestic investments to mitigate risks. Semiconductor fabs, which are among the most complex and expensive industrial facilities to build, cost between $10 billion and $25 billion per site.
“Companies must carefully evaluate multiple factors before making investment decisions, including talent availability, tax policies, regulatory frameworks, and environmental and labor market conditions,” the industry body noted.
(Photo courtesy: IANS)
