The US Copper Tariff may Affect India's Electronics and Semiconductor Initiatives
Donald Trump’s latest announcement to impose hefty 30 percent tariffs on imports of copper products into the US has sparked fresh concerns among market players around the globe. Many feel that the copper tariffs are likely to impact Indian sectors such as semiconductors and electronics.
Reports indicate that analysts believe the global supply chain will be influenced, and the copper tariffs may also impact production efforts involved in India’s ambitious semiconductor initiatives.
The key factor contributing to the potential effects on India is the country's reliance on imported high-purity copper products. Any disturbances in the global supply chain could adversely affect local industries.
The report further mentioned that leading stakeholders have urged the Indian government to not only streamline copper imports but also enhance investment in domestic production.
Ashok Chandok, President of SEMI India says that copper is crucial for producing power systems, chip wiring, interconnects, and PCBs. He also pointed out the challenges encountered by those importing gold-plated copper wires.
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The IESA President noted that while domestic manufacturers like Sterlite, Hindalco, and Hindustan Copper do supply the copper required for semiconductor production, achieving the necessary scale remains a challenge. He added that once the tariffs are implemented, there will be increased rates in global supply, consequently raising production costs.
Kunal Chaudhary, a partner and co-leader of the Inbound Investment Group at EY India, stated that while the levies do not directly affect semiconductors, issues with the supply of refined copper will lead to higher costs. Copper is a vital element for chip wiring.
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In the fiscal year 2024–25, India exported copper and copper products worth $2 billion, which included $360 million—or about 17 percent—sent to the US. The US ranks as India's third-largest market for copper exports.