Electronics Sector Faces Cost Surge as Iran War Disrupts Supply Chains, Industry Flags Price Hikes

India’s electronics manufacturing sector is grappling with rising cost pressures and supply chain disruptions following the ongoing impact of the Iran conflict, despite a temporary ceasefire between Iran and the United States. According to reports by NDTV Profit, industry players are increasingly concerned about escalating input costs, delayed shipments, and currency-related stress, which could soon translate into higher prices for consumers.

The sector, which is heavily reliant on global supply chains, is witnessing significant operational challenges as geopolitical tensions reshape trade routes and logistics timelines.

Export Delays and Inventory Challenges

One of the most immediate impacts has been a sharp increase in export lead times. Shipments to key markets such as the US and Europe now take up to 70 days, compared to the earlier average of 45 days.

This disruption has forced manufacturers to manage extended inventory cycles, locking up working capital and increasing operational inefficiencies. The situation is further compounded by the depreciation of the Indian rupee, making imports of critical components more expensive.

Together, these factors are placing a dual financial burden on companies already operating with tight margins.

Raw Material Inflation Across Segments

The cost escalation is widespread, affecting both core components and basic consumables. Prices of chipsets have risen by 15–20%, while consumables such as grease and packaging materials have surged by as much as 45%.

The chemical segment has witnessed even sharper volatility, with organic chemicals and hardeners seeing price increases of 40–70%. Epoxy resin prices, for instance, have climbed from ₹300 to ₹400 per kilogram, while plastic resins and helium costs have nearly doubled.

Such broad-based inflation is making it increasingly difficult for manufacturers to absorb costs internally without impacting profitability.

Industry Seeks Government Support

In response to mounting pressures, industry players have urged the government to consider a zero-duty regime on key inputs such as plastic materials, liquified natural gas, and essential metals.

Manufacturers argue that tax relief is necessary to offset rising import costs and currency fluctuations. Without intervention, companies warn that the cumulative cost burden will eventually be passed on to consumers, leading to widespread price increases across electronic goods.

Conclusion

The electronics sector is navigating a challenging phase marked by geopolitical disruptions, rising input costs, and logistical bottlenecks. While a temporary ceasefire offers some relief, underlying uncertainties persist. Unless supply chains stabilise or policy support is introduced, higher costs are likely to cascade down to consumers, potentially impacting demand in the coming months.

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