More iPhones from India? US trade deal shot in the arm for electronics makers

Trump said he and Modi agreed to a trade deal between India and the US, nearly a year after the two sides agreed to work on a comprehensive bilateral trade agreement. Trump said that under the agreement, Washington will reduce bilateral customs duties on Indian goods from 25 percent to 18 percent, and India will reduce customs duties and non-tariff barriers against the United States to zero.

According to Bloomberg, citing officials familiar with the matter, the United States is also removing the extra 25% tax on Indian goods in return for India’s purchase of crude oil from Russia.

In a post on X, Modi said he was “delighted that Made in India products now have 18% discounted tariff.”

Policy certainty

For India’s electronics sector, where exports are dominated by smartphone assembly for Apple, the proposed deal reads less as an immediate volume trigger and more as a signal of policy stability that could strengthen long-term investment and export plans.

Two companies that will benefit from greater clarity on trade are homegrown Tata Electronics and Taiwan-based global contract manufacturer Foxconn’s Bharat FIH Ltd. Indian organizations under it. Both have made significant investments to expand their iPhone assembly capacity as well as go deeper into the electronics supply chain to generate more value.

“While detailed information is awaited to confirm the net impact on electronics import duties, the trade agreement agreement between the two countries brings policy certainty and provides India with a strong foundation to further drive export growth,” said Ankush Wadhera, managing director and partner, semiconductors, India lead at consulting firm Boston Consulting Group.

Wadhera added that for sectors operating on a significant scale targeting domestic consumption, such as electronics, the trade agreement will help expand export volume and enhance India’s position as a destination beyond China with strong policies, fiscal support and a unique geopolitical stance in the ever-evolving global trade order.

According to data from the Ministry of Electronics and IT, in FY25 India exported electronics worth $38.6 billion. On this basis, iPhone exports amounted to over $10 billion, making it a critical export category for the country. Mint It had reported in June last year that India could amass more than 60 million iPhones for exports by the end of FY27, most of which are likely to cater to the US market.

Trump’s tariffs have burdened Apple, the largest US technology firm that relies on a globally distributed supply and assembly chain. On Jan. 29, Apple chief Tim Cook said during the company’s December quarter earnings that the iPhone maker paid $1.4 billion, or 0.9% of its quarterly operating income, in additional costs due to tariffs imposed on countries around the world, primarily China.

Tata Electronics, which currently accounts for about 40% of all iPhone components in India, declined to comment. Apple and Foxconn did not immediately respond to Mint’s questions.

Apple’s strategic certainty to increase the percentage of devices manufactured in India remains the same as before “since electronics are already exempt from US trade tariffs,” a person familiar with the developments said.

Harshit Kapadia, vice president at brokerage firm Elara Capital, said that beyond a direct increase in revenue, “the trade agreement signals certainty and stability of policy and will enable the Indian electronics sector to invest significantly in increasing its export capacities as exports and industrial electronics offer higher margins and growth opportunities.” he said.

“The existing sector will mature and grow and cater to stronger vertical integration of electronics, which will attract more business from across sectors. This will strengthen EMS firms at a time when India’s most listed EMS player is struggling in the stock markets,” Kapadia said.

The biggest firm in question is Dixon Technologies, which has been under pressure due to its over-reliance on mobile phone assemblies, a sector that suffered a 28% slowdown in the December quarter, according to Dixon’s earnings.

Beyond Apple’s iPhones, other categories such as medical and industrial electronics are also likely to see an increase in exports, which will see companies like Dixon Technologies and Syrma SGS take off in the near term.

“While the US is not currently a major contributor to our revenue, plans to focus on the US as a market have taken a backseat due to the uncertainties of the past year. Now, we are confident that we will double down and customers from the US will start coming in, and in the near term we expect export revenue to the US to contribute to a third of Syrma’s revenue,” said Jasbir Singh Gujral, managing director of Syrma SGS.

A Dixon Technologies spokesperson could not immediately be reached for comment.