Reciprocal tariff of 27% relatively positive for electronics sector: Dixon Technologies

The White House's reciprocal tariffs imposed on most countries of the world, which has the largest trade deficits with the US, including India, is a positive for India, on relative terms for the electronics sector, as the rates are much lower than China and Vietnam, India's key rivals in electronics exports.

Dixon Technologies, which had an exposure of Rs 1700-1800 crore in FY25 to the United States, said at first look, the reciprocal tariffs on India to the tune of 27% is a positive, if compared against other manufacturing nations such as China and Vietnam.

"We in India have to look at all the avenues of deepening the value addition, localising more, and bringing down our cost, all that is a parallel activity. At first glance, it looks positive in relative terms," said Atul Lall, CEO and MD of Dixon Technologies.

Telecom equipment maker GX Group said it has executed a shift in global business, focusing on high-potential, underserved markets ahead of the reciprocal tariff announcements.

"We at GX have executed strategic global shift by accelerating into favorable, high-potential markets. Leveraging our Ping Communication acquisition, where we will be scaling in South America along with Africa targeting low-tariff, underserved markets with strong infrastructure demand to establish long-term market leadership," CEO Paritosh Prajapati said.

The company is eyeing $50 million in revenues from the Latin America region.

The executive said the 27% tariff on Indian exports to the US will impose a notable cost barrier on hardware exports to the US.

"However, this remains comparatively lower than tariffs levied on other major Asian manufacturing hubs . As a result, India-based manufacturing still holds competitive edge," Prajapati said.

The contract manufacturer, a key beneficiary of the production-linked incentive scheme, exported smartphones worth Rs 1700-1800 crore to the US, primarily for its customer Motorola.

Dixon has forecasted revenues of Rs 4500-5000 crores from exports to the US this fiscal, primarily through its order book from Motorola, projecting almost a larger growth than the 35% rate it saw last year, Lall said.

The 27% reciprocal tariff on India is much lower than the tariffs on China and Vietnam, which face combined tariffs of up to 54-79% (China) and 46% (Vietnam), makes Indian exports relatively more competitive.

Lall said Dixon will be in conversation with its customers, primarily Motorola, which make up the bulk of exports for the firm, adding that the company will also wait and watch how things unfold.

Another contract manufacturer, Optiemus Infracom said since it has no business in the US, it's current business is relatively insulated from the tariff action.

The company plans to start making screen protectors and cover glasses for mobile phones, primarily for domestic consumption in the near term.

"China and Vietnam are the largest manufacturers of screen protectors, and the US is the largest consumer of this product. We expect some of that production to now shift to India. I am hopeful of securing more orders," said Ashok Gupta, chairman, Optiemus Infracom.