US Tariffs: The trade war between the United States (USA) and China is intensifying and turning into a cold war. As the US President has imposed retaliatory tariffs, China is also increasing tariffs in return. The two countries are competing in this regard. There are concerns about where these developments will lead. It is noteworthy that Chinese companies are offering discounts to Indian companies to sell their products as orders from the US have decreased due to Trump’s tariffs.
The trade war between America and China is intensifying day by day. Trump, who has targeted China, is increasing tariffs on tariffs. Due to this, orders from America have decreased for Chinese companies. In this context, manufacturers of electronic components in China are offering discounts to Indian companies. They are offering discounts of up to 5% to Indian companies. According to television, refrigerator, and smartphone manufacturers, the discounts from Chinese companies will allow Indian manufacturers to increase their profits by 2-3%. They will transfer this benefit to consumers to increase sales.
Chinese imports account for about 75% of the total electronics components used by Indian companies. “China’s electronics component manufacturers are under pressure,” said Kamal Nandi, head of Godrej Appliances. He believed that prices would be discussed with Indian companies as orders from the US fell. Usually, when it comes to electronics, there are raw material stocks sufficient for two to three months. Companies start new orders from May to June. According to a report by the Global Trade Research Initiative, India’s electronics component imports increased by 36.7% to $ 34.4 billion in the fiscal year 2024 compared to the previous year. Imports (15.8 billion dollars in 2019) have increased by 118.2%.
Chinese manufacturers are facing a raw material surplus, said Avneet Singh Marwa, CEO of television contract manufacturer Super Plastronics. “There is concern that exports from China to the US have stopped. Chinese component manufacturers are in talks to reduce prices by up to 5% for Indian companies,” Marwa said. But, “due to lack of domestic demand, these companies may reduce prices to pass on the benefits of the subsidy to consumers.” Electrical and electronic equipment will top US imports from China in 2024.
Demand for Chinese equipment has declined due to government incentives for domestic companies, stricter quality standards, and tariffs. This has encouraged local manufacturing. The government, which announced the Electronics Component Manufacturing Scheme two days ago, has estimated that the sector will reach $145-155 billion by 2030. Currently, India imports key electronic components including chips, compressors, inner-grooved copper tubes, open-cell television panels, printed circuit boards, battery cells, display modules, camera modules, and flexible printed circuits. Atul Lal, MD, Dyxon Technologies, believes that the slowdown in the US market and reduced demand will reduce the prices of components.
Also Read: Tariffs and the US-China Dispute
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