FOR A LARGER APPLE PIE

India may gain, more than China, from Trump's tariff exemption on electronic devices, but there are challenges

- SURAJEET DAS GUPTA

The surprise step back by the Donald Trump administration late Friday evening could provide an edge to India vis-a-vis China, analysts believe. Addressing American consumers' fears of price rise and also supporting tech giants, the US Customs and Border Protection exempted smartphones, laptops and other electronic items from reciprocal tariffs—a move that is being seen especially beneficial for the Cupertino-headquartered company which contract manufactures iPhones in China, India and a bit in Brazil. Between China and India, over $40 billion worth of iPhones are assembled and shipped to the United States—the largest market for Apple Inc at around 58 per cent.

The exemption will enable China to export smartphones to the US at 20 per cent—a tariff imposed earlier by the Trump administration because of China's alleged role in fentanyl trade. While in a major respite, China will escape the staggering 125 per cent tariff imposed earlier as reciprocal duties, India will be again able to export mobiles at zero duty to the US. India does not have to pay the mandated 10 per cent tariffs for 90 days and the subsequent 26 per cent reciprocal duties imposed earlier this month.

India could however lose its advantage if Trump scraps the duty on China because of fentanyl trade. Also, the US administration has indicated that there may be a fresh round of tariffs on electronic goods soon, without specifying the details. US commerce secretary Howard Lutnick said on Sunday that the decision to exempt a range of electronic devices was a temporary reprieve.

In his first term, Trump had listened to Apple CEO Tim Cook and exempted penal duties on smartphone imports by the US, keeping it at zero. This time, global tariff war is already in play.