India-US Deal Major Catalyst for Semiconductors: President IESA
Ashok Chandak, the President of SEMI India and IESA, expressed that the trade agreement between India and the US has the potential to significantly impact India's electronics, semiconductor, and technology sector.
He emphasized that the deal has the capability to enhance semiconductor design and production, increase value addition, and promote collaboration in AI and data center technology. The statement holds great importance due to the recent trade agreement reached between the US and India after extensive discussions.
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President Trump announced on social media that Washington will reduce the tariff on Indian goods from 25 percent to 18 percent, following a discussion with Prime Minister Narendra Modi. The Prime Minister expressed his satisfaction that goods manufactured in India would now be subject to a decreased tariff rate of 18 percent.
Chandak of the India Electronics and Semiconductor Association (IESA) expressed that the trade agreement between India and the US has the potential to significantly propel India's electronics, semiconductor, and technology sectors. Chandak stated that the agreement improves market access, facilitates the seamless flow of capital equipment and advanced technologies, and, when combined with the iCET and TRUST initiatives, strengthens trusted supply chains and enhances technology collaboration. This significantly boosts India's appeal as a global hub for manufacturing and innovation.
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"It will accelerate semiconductor design and manufacturing, boost electronics value addition, and expand cooperation across AI, data centres, and advanced manufacturing - creating high-skill jobs and positioning India as a strategic and reliable partner in the global technology value chain”, he adds.
According to him, the goal of achieving a bilateral trade volume of $500 billion could result in a significant increase of over $100 billion specifically within the electronics and semiconductor sector.
The timing of this agreement holds great importance. India has seen a notable increase in its electronics export to the US, largely propelled by the market for smartphones.
Specifically, India's exports of smartphones to the US experienced a substantial surge of over 200 percent from April to November of Fiscal Year 26, amounting to $12.54 billion compared to last year's $4.1 billion during the same period, as indicated by data from the commerce department.
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The triple increase in this particular export sector mitigated significant decreases in various longstanding export categories, despite the US implementing a high 50 percent tariff on all goods, prompting worries of a more extensive decline in exports.
Over the recent years, Apple and its primary contract manufacturer Foxconn have notably increased their manufacturing capacity in India. Apple currently produces various models of iPhones in the country, with a significant portion of the production being designated for export. Foxconn has also increased its investments in Tamil Nadu and Karnataka, in addition to fostering a larger network of suppliers.
According to experts, a greater level of policy clarity between the two countries would be beneficial for multinational companies considering incremental capacity expansions on a global scale.