NEW DELHI, Feb 10: India’s electronics industry welcomed the India-US trade deal and expected it to open up opportunity of market expansion for electronics and semiconductor products in the global marketplace, especially for MSMEs.
Sectorally, the industry feels, the trade pact will enable advanced partnerships in Semiconductors, design and IPs. It will also provide Indian companies access to electronic components such as IC substrates, sensors and microcontrollers, carbon fibres and some specialty materials.
Sharing insights on this deal, Rajesh M Revankar, Vice Chairman Electronics and Computer Software Export Promotion Council (ESC) said, “The India-US Free Trade Agreement (FTA) envisages tariff reductions for Indian exports to the United States and deeper bilateral trade engagement, creating unprecedented opportunities for India’s electronics and semiconductor sectors in terms of global market access, investment inflows and integration into high-value supply chains.”
Shedding light on sectoral expansion, he said that this FTA can help the country in diversifying the electronics export market which is currently highly skewed toward smartphones (nearly 70pc of total exports), while opening new frontiers in semiconductor design, IP, and chip-related exports.
On the investment front, Revankar noted that this agreement is expected to attract higher FDI into electronics, semiconductors, and advanced packaging and testing, encouraging global players to establish manufacturing facilities, GCCs and R&D centers in India as a strategic alternative to mitigate geopolitical risk.
“Beyond export competitiveness driven by tariff rationalisation, the FTA signals a significant opportunity for India to move up the value chain-from final assembly to deeper localisation of components and sub-assemblies, stronger supplier ecosystems, and expanded system integration capabilities” he said.
Revankar believes that this deal represents a pivotal inflection point for India’s electronics and semiconductor industry.
Coming on semiconductors, he said that the FTA strengthens India’s position as a global semiconductor design and verification hub by enabling IP creation and chip-architecture partnerships.
“In the near term, ATMP/OSAT capacity presents attractive opportunities due to lower capital intensity and faster time-to-market for US semiconductor companies” he added.
ATMP or Assembly, Testing, Marking and Packaging OSAT or Outsourced Semiconductor Assembly and Test are critical backend processes in the semiconductor supply chain that convert raw and fabricated wafers into finished chips.
Another industry veteran, Amrit Manwani, Chairman Sahasra Group, said, “India – US trade deal is a welcome development for the Electronics sector. The deal will enable growth of electronics hardware exports to the USA and help India become an integral and important player in the global value chain.”
Manwani said that the trade deal will help MSME companies to seriously explore and expand their footprint in the USA. The government’s efforts in negotiating this lucrative trade deal needs huge applause from the Electronics industry.
Highlighting some challenges, Veer Sagar, Chairman of ESC said that electronics is well insulated but the only problem could have been with movements of manpower and visas.
He pointed out that the issue related to manpower and visas ‘hasn’t been touched.’
“All indications are positive for IT, both hardware and software. We can look forward to lots of US investments into India and collaborations, especially AI and design integration” he added, highlighting the optimistic view for the hardware and software industry.
(UNI)
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