Electronics goods exports rose by capturing part of China’s share
By Subrata Majumdar
Defying all the predictions about the fall in Indian exports to the USA following the imposition of high tariffs of a total of 50 per cent, the Indian exports to USA in the first six months of 2025-26 (April-September) surged to the big relief of the commerce ministry. The first phase of 25 per cent was imposed in April and the second penalty of another 25 per cent was imposed in August this year, but still the exports rose as against the corresponding period of the previous financial year.
During the first 6 months of 2025-26 (April-September), India’s export to USA increased by 13.4 percent, corresponding to the increase by 5.7 percent during same period in the preceding year
In contrast, China’s export to USA squeezed. In the first 8 months of 2025 (January-August), China’s export to USA dropped by 15.5 percent. USA slipped to 3rd rank in China’s export list, behind ASEAN and EU, even though USA’s stint as largest trading partner of China continues. In other words, China diversified its exports to emerging markets, particularly to ASEAN, India, Africa, as well to EU. Trade with ASEAN increased by 8.6 percent in January-August 2025, with Vietnam, Thailand and Indonesia as the prominent destinations.
How has India built up strong resilience to Trump’s high tariff weaponization?
One of the distinguished features for India’s strong resilience to Trump’s tariff backlash was the fall in Chinese export to USA. Downturn in Chinese export to USA tendered a space to India to capitalize the vacated market of China.
Notably, India emerged a tough competitor to China in export of electronic goods in USA. There was a boom in the growth of electronic goods to USA from India since last 3 years. Electronic goods emerged as the biggest item in the export basket to USA in 2024-25, accounting for 17.8 percent of total export to USA The average growth in India’s export of electronic goods to USA recorded 72.8 percent per year during last three years. Hitherto, drugs and pharmaceuticals, diamonds and jewelry and petroleum refinery products were the major items in the export basket to USA.
This demonstrates a dramatic change in the export basket of India to USA. India vied a challenge to China’s behemoth in US electronic market during Trump’s tariff war period and evoked a new era in the global order of supply chain.
US imports from China slashed since Trump’s second period of Presidency. This impacted China’s export of electronic goods to USA. Monthly export of electronic goods from China plunged. Export of electronic goods plummeted from US $ 3.4 billion in May 2024 to US$1.1 billion in May 2025, even though they were exempted from reciprocal tariff. The consistent month to month decline in exports gave a major scope to India to capitalize China’s lost market in USA.
Eventually, in pursuance to steep fall in Chinese exports of electronic goods to USA, India’s exports surged in the USA market. During first six months of 2025-26 (April- September), India’s export of electronic goods to USA spurred by 132 percent.
The growth trajectory of India’s electronic export to USA relies on the boom period of Indian electronic industry. The present Indian electronic industry is valued at about US$ 155 billion. There is six-fold increase in electronic goods industry during the last decade. Eventually, this led five-fold increase in exports of electronic goods in the decade – from US $7.1 billion in 2014-15 to US$ 40.9 billion in 2024-25.
According to PWC report, India’s electronic manufacturing industry will reach US $ 282 billion by 2030, nearly double of the current level. The growth will be driven by mobile phones and wearable, Semiconductor and consumer electronics. PLI (Productivity Linked Incentive) and other peripheral incentives have been crucial for boosting manufacturing and attracting investment.
FDI (Foreign Direct Investment) played key role in the development of electronic industry, with a significant impact on exports. India has attracted FDI worth US$4 billion since 2020-21. The trigger in FDI in electronic sector was catapulted by “China+1” strategy.
Given the “China+1” strategy, India became a fovoured nation for foreign investors. The new and innovative government policy to attract foreign investors, like PLI scheme coupled with low labour cost, India emerged as an important destination for foreign investors. The windfall flagged India an emerging hot destination for manufacture of electronic goods. Foreign investment in manufacturing of electronic goods sparked to 193.6 percent increase in 2024-25, against average growth of 25 percent in the preceding years. Eventually, the global electronic leaders like Apple, Samsung and Foxconn came to India and emerged as the major exporters of electronic goods to USA.
To this end, it would not be over-optimistic to project India the next generation supply chain hub. (IPA Service)
