Teams across the table, Delhi seeks zero tariff on export of electronics

Indian Express

2 days ago

As part of its ongoing trade talks with the US, India has sought a zero-tariff structure on export of electronics items to the country, even as President Donald Trump has raised concerns around import of gadgets like the iPhone from India, and has threatened to slap additional tariffs on Apple if it sells foreign made phones in the country.
'We have sought zero duty on electronics exports to the US and our negotiators are currently discussing how to operationalise that,' a senior government official told The Indian Express requesting anonymity since the discussions are currently private.
As part of his wide ranging tariff action in April, Trump had imposed a 26 per cent rate on imports from India. And while India was among the countries which saw a 90-day pause from the revised rates, the US President has since ratcheted up criticism of companies selling electronics products in the US, which are manufactured in China, India and elsewhere.
As Indian trade negotiators landed in the US last Friday for the final round of in-person talks before the July 9 deadline for the reciprocal tariff pause runs out, Trump said the US and India 'may' sign a deal that will 'open up India'.
Weeks after Apple said that a majority of iPhones to be sold in the US will be produced in India and its contract manufacturer Foxconn followed it up with a $1.49-billion investment plan in one of its India unit, Trump had said Apple would have to pay 25 per cent tariff if it sold in the US iPhones built in India or anyplace else.
Earlier, he said that he told Apple CEO Tim Cook that he does not want the company to expand its manufacturing operations in India, unless it is to cater specifically to its domestic market.
The Indian Express had reported that the US flagged a number of non-tariff barriers and high duties in India, but was yet to commit to several Indian demands, more so because the US currently lacks a valid Trade Promotion Authority (TPA). Without this, the current US administration is not legally permitted to reduce tariffs.
Experts have pointed out that the tariff-related discussions in the bilateral trade agreement (BTA) negotiations may be limited only to executive-level tariffs levied by the current administration, raising questions about the long-term durability of any deal reached.
Despite Trump's earlier warning to Apple that it should focus on production in the US and refrain from expanding in India, Foxconn informed the London Stock Exchange earlier this week that it was investing $1.49 billion in one of its India units, Yuzhan Technologies (India) Pvt Ltd. The plant is expected to come up in Tamil Nadu, where Foxconn also has a major iPhone production base.
Currently, iPhones are primarily assembled in China, India and Vietnam, with Apple having plans to expand operations in India. Experts have said that moving production to the US would be impractical for Apple, given that the company has no manufacturing and supplier base in the country.
Apple has identified India as a key market for iPhone production and a gradual base for its suppliers in a move away from China. The company currently produces nearly 15% of all iPhones in India, with plans to increase that to a quarter in the coming years. The company's assembly operation in India has been a key success story of the government's 'Make in India' push.
Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers' rights, privacy, India's prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. ... Read More