NEW DELHI: The bilateral trade deal announced by India and the United States is expected to significantly boost India’s electronics exports and increase domestic value addition, industry experts said.
The agreement, announced late on Tuesday night by US President Donald Trump and Prime Minister Narendra Modi, includes a reduction in tariffs from 50% to 18% and aims to expand bilateral trade to $500 billion.
Industry analysts said the agreement could generate more than $100 billion in trade in the electronics and semiconductor sectors. At present, value addition in smartphone manufacturing in India stands at around 20% to 22%.
“The India–US trade deal can be a major catalyst for India’s electronics, semiconductor, and technology ecosystem. 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,” said Ashok Chandak, President of SEMI India and IESA.
In a social media post, President Trump said India had agreed to stop buying Russian oil and instead purchase much larger volumes from the United States, and potentially from Venezuela.
He also said India committed to “BUY AMERICAN” at a much higher level, including purchases of over $500 billion worth of US energy, technology, coal, agriculture, and other products. Prime Minister Modi said Made in India products would now face a reduced tariff of 18%.
In August 2025, the US announced a reciprocal tariff of 25%, along with an additional 25% penalty tariff on purchases of Russian crude. The electronics sector, however, remained exempt from the reciprocal tariff.
Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), described the agreement as a positive and competitive outcome for India.
He said that at the agreed 18% tariff rate, India remains well placed compared to key manufacturing peers and retains its attractiveness as a global manufacturing and export hub.
“While we await the finer details of the deal, the direction clearly supports India’s strategy of scaling manufacturing and integrating deeper into US-led global value chains, particularly in electronics.
We see strong potential for expanded technology collaboration and envision electronics trade reaching USD 100 billion within the broader $500 billion India–US trade ambition,” Mohindroo said.
In FY25, smartphones emerged as India’s top export category, with iPhone exports accounting for about 75% of total smartphone shipments. Apple reportedly exported iPhones worth over $16 billion from India in the first nine months of FY26.
The company has increased iPhone production in the country, which now accounts for more than 20% of its global output. Apple CEO Tim Cook said in 2025 that all iPhones exported to the US would be made in India.
