India Likely to Offer Tariff Relief on US, EU Smartphone Imports Through FTAs

India is exploring the possibility of reducing or eliminating tariffs on smartphones imported from non-producing nations such as the United States and the European Union.

This move comes as part of broader efforts to finalise trade agreements with both regions and to settle longstanding disputes while safeguarding the interests of the domestic smartphone manufacturing ecosystem.

Strategic Concessions to Non-Producing Countries

According to news reports, India is open to granting tariff concessions on smartphones through the proposed trade deals with the US and the EU. India scarcely imports smartphones from either the US or the EU, and thus, the risk to the local industry is minimal.

These concessions could provide multiple strategic benefits. For instance, with the US, reducing import duties on smartphones may help insulate the sector from potential future protectionist policies under a renewed Donald Trump administration. 

As for the EU, tariff cuts may pave the way for resolving a dispute at the World Trade Organisation (WTO). In 2019, the EU lodged a complaint against India over steep duties on ICT products, including mobile phones, which the WTO ruled in favour of the EU in April 2023. Bilateral talks have since been initiated to resolve the matter amicably.

Industry Push and Export Opportunities

India currently imposes a 16.5% basic customs duty (BCD) on US smartphones, with additional surcharges, and up to 20% duties on those from the EU. The Indian Cellular and Electronics Association (ICEA), representing major players like Apple, Foxconn, and Dixon recently urged the Commerce Ministry to scrap these tariffs for smartphones, telecom equipment, wearables, and consumer electronics imported from the US. The ICEA highlighted that since the US is not a direct manufacturing rival, such concessions would not harm local production.

Moreover, the ICEA stressed that zero-duty imports could support India’s ambition of achieving $50 billion in smartphone exports and $80 billion in total electronics exports to the US, aligning with the country’s $500 billion electronics production goal. Notably, India’s smartphone exports surged 55 per cent in 2024-25, reaching $24.14 billion, with the US emerging as the largest market.

The US has so far refrained from imposing higher reciprocal tariffs on smartphones, despite broader tariff actions. Meanwhile, India is working toward finalising a mini trade deal with the US by July 8 and aims to conclude an early harvest agreement with the EU within the same timeframe as a precursor to a comprehensive trade pact.

Read More: Apple Mulls to Shift all US-Bound iPhone Assembly to India by 2026.

Conclusion

India’s selective tariff relaxation strategy reflects an approach to trade negotiations that protects domestic manufacturers from competition while leveraging non-producing markets to enhance exports and consumer access. By advancing talks with the US and EU, India positions itself to resolve disputes, reduce consumer costs, and further its electronics export targets.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.