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The U.S. decision to impose tariffs on semiconductors is unlikely to significantly impact India in the short term, as the country is not a major chip exporter to the U.S., industry experts said Thursday.
With India already imposing zero import duties on semiconductors, the country faces no immediate trade retaliation concerns, said Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA).
Most of India’s upcoming semiconductor manufacturing and assembly facilities cater to global brands, and its growing domestic demand will be met primarily through local production.
In the long run, Indian chipmakers are expected to remain competitive, as the U.S. tariff applies uniformly to all exporting nations, Chandak noted.
The Trump administration’s decision to impose tariffs of 25% or more is expected to reshape the global semiconductor industry, affecting costs, supply chains, and innovation.
The new tariffs will significantly increase the cost of chips imported into the U.S., particularly from dominant manufacturing hubs like Taiwan, South Korea, and China. These additional costs will likely be passed on to consumers, driving up prices for smartphones, laptops, electric vehicles, and industrial electronics.
Tech giants such as Apple, NVIDIA, and Tesla could see rising production costs, potentially squeezing profit margins or forcing them to raise consumer prices, according to IESA.
To mitigate risks, companies may explore alternative supply chains or invest more in domestic chip production. However, semiconductor fabrication plants are among the most capital-intensive projects, requiring $10 billion to $25 billion per site.
“Companies must weigh multiple factors before making investment decisions, including workforce availability, tax policies, regulatory frameworks, and environmental considerations,” IESA stated.
