US electronics trade: India lags peers in plugging China gap

India is far behind global competitors such as Vietnam, Taiwan, and Mexico in increasing electronics exports to the US by making the most of Washington's tariff action against China.

In 2018, the US imposed a 25 per cent punitive duty on a range of Chinese electronics items.

The trade duties led to a sharp fall in Chinese electronics exports to the US from $207 billion in 2018 to $140.2 billion in 2019, down 32 per cent, according to Indian Cellular and Electronics Association (ICEA) data, which has been analysed by ITC Trade Map.

The fall created a vacuum as the US is the largest importer of electronics products globally. Its imports of such products stood at $518 billion in 2023, up 16 per cent compared to 2018.

Vietnam has been the biggest beneficiary.

It saw an incremental increase in electronics exports worth $39.1 billion between 2018 and 2023.

Vietnam’s exports rose from $12.1 billion in 2018 to $51.2 billion in 2023.

This figure represents a 28.3 per cent share of the total non-Chinese incremental electronics exports in terms to the US in the same period.

India’s electronics exports to the US rose by $7.6 billion in terms between 2018 and 2023, up at $8.9 billion from $1.3 billion in 2018.

Despite this seven-times increase, it represented only 5.5 per cent of the total non-Chinese incremental electronics exports to the US in this period.

Taiwan is also ahead of India, having grabbed a 25.6 per cent share of incremental exports, rising from $18.1 billion in 2018 to $53.5 billion in 2023.

Mexico, too, has seen a rise in incremental electronics exports to the US in terms that represents 11.2 per cent of non-Chinese exports.

Unhappy with the situation, the ICEA has been pushing the government for support to help its members take advantage of the Chinese demotion.

It has identified key products such as set-top boxes, wireless communication apparatus, and flat panel televisons that India could promote in the US.

"We were not quick off the block,” said ICEA chairman Pankaj Mohindroo.

“The bulk of the shift went to Vietnam, Taiwan and Mexico.

"We are trying to catch up now and hope to make the $100 billion bilateral trade target with the US within a decade."

The other problem is that the US continues to keep many key products off the list.

These include laptops, tablets, smartphones, chargers, USB cables and lithium ion batteries – all items that India could export. But without a 25 per cent duty.