NEW DELHI: The electronics sector is currently not impacted by the United States’ reciprocal tariff, said Minister for Electronics and Information Technology Ashwini Vaishnaw on Tuesday. His clarification follows the U.S. government's announcement of a 25% tariff on select Indian imports, effective August 1, along with an additional 25% penalty linked to India’s ongoing procurement of Russian military equipment and oil.
“As of now, there are no taxes or tariffs on electronics,” said Vaishnaw.
India’s electronics exports have witnessed a sharp surge in the first quarter of FY26, rising 47% year-on-year, driven largely by record mobile phone exports to the United States. According to industry data, smartphone shipments from India to the US soared 240% year-on-year and now account for 44% of all smartphones imported into the American market.
In April 2025, the US granted a 90-day exemption on select electronics, allowing Indian exporters to continue shipments without being subject to the new tariffs. These exemptions are set to expire on August 14. A review meeting is expected in Washington before the deadline to decide whether the relief will be extended under Section 232 of the US trade law.
Vaishnaw also addressed the shortage of rare earth magnets in the country, which are essential for high-performance electric motors, wind turbines, medical devices, and other advanced technologies. With around 85% of global rare earth magnet production controlled by China, India is working to reduce dependency.
“First, under India’s Critical Minerals Mission, we are securing rare earth materials through mining efforts around the world. Second, rare earth elements are available within India—especially in monazite-rich beach sands from Odisha to Gujarat, particularly in Odisha, Andhra Pradesh, Tamil Nadu, and Gujarat,” he said.
“We are working to process these materials and convert them into permanent magnets. We are seeing good progress in that area,” he added.
The minister also announced the approval of four new semiconductor projects in Odisha, Punjab, and Andhra Pradesh under the India Semiconductor Mission (ISM). These projects involve a cumulative investment of approximately ₹4,600 crore. With these approvals, the total number of sanctioned projects under ISM has reached ten, spread across six states, with total investments of around ₹1.60 lakh crore. Vaishnaw also shared that previously approved projects are progressing well and are expected to start delivering results this year.
“The earlier projects are progressing very well, and very soon, we will have made-in-India chips. All these new projects will begin production within the next two and a half to three years. For semiconductor projects, we have collaborations with the U.S., the EU—particularly Germany, Belgium—as well as Singapore, Japan, South Korea, and we are in discussions with Malaysia too,” said the minister.