Electronics manufacturing services (EMS) firm Syrma SGS Technology Ltd has said that it is not very worried right now about the high US tariffs on Indian goods as it generates only 5% of its total revenue from US exports, constituting only 20% of their total exports.
Jasbir Singh Gujral, MD of Syrma SGS, said: “The company’s revenue from the US exports is between Rs 250 crore to Rs 300 crore. I am not very worried about how we are managing the tariffs. Some (goods) are exempt, while some are not. Between us and the customer, we are absorbing the cost, and whatever profits we are showing they are after the absorption only. Going forward, in the next 3-4 financial years, when the exports rise from India, I think tariffs will settle down. If tariffs remain at 50%, there is no way we will continue to export from India. Then I will have to restrategise and migrate to some other countries where there are no tariffs.”
He added that once there is a policy clarity and stability at the American level, then only business people can make decisions. “I think things will settle down in the next 30-40 days. We have been expecting it for the past three to four months.”
Syrma SGS is one of the EMS companies which have got approval from the Union government to set up a printed circuit board (PCB) in Naidupeta, Andhra Pradesh. The construction of the plant will start by the year-end as it got approval from the Andhra Pradesh government on October 27. The State government is giving 50% capital subsidy out of the total Rs 765 crore investments in the first phase. Moreover, the company will also receive revenue-based incentive from the Union government for the production of multi-layer PCB, while nearly 10% subsidy for manufacturing copperclad laminates (CCL) and high-density interconnector (HDI) PCB from the Centre. This facility will also start manufacturing flex/HDI PCB and raw materials like CCL by FY2028-29 or FY2029-30.
Speaking about its expansion plan, Gujral said that they are investing in defence and renewable sectors. Syrma recently acquired a 60% stake in Navi Mumbai-based defence and maritime electronics company Elcome Integrated Systems Pvt Ltd. In October, the company also invested 49% in KSolare Energy Private Ltd, a leading solar inverter manufacturer in Maharashtra’s Pune.
“We acquired Elcome because we are not in the defence sector. On solar inverters, we have tied up with Premier Energies and there I see a good traction. We make about 2.5-3 lakh solar inverters in a year, which I believe has the potential of going up to 5-7 lakh in the years to come.”