President Donald Trump’s announcement on Wednesday of a 25 per cent tariff rate on India from August 1 has triggered concerns in the government that electronics exports to the United States, particularly the growing smartphone exports — which currently attract no customs duty — could be affected.
A senior government official said a review meeting on Section 232 of the US Trade Expansion Act of 1962 is coming up in two weeks, after which there will be more clarity on whether smartphone exports could be impacted. In 2018, the US had imposed an additional tariff of 25 per cent and 10 per cent on steel and aluminum respectively, globally under the same provision, which had impacted Indian exports.
While smartphones are India’s top export to the US by value, Trump has threatened a 25 per cent tariff on Indian-made Apple iPhones, which account for the bulk of mobile phone exports to the country. Days after he announced reciprocal tariffs on a number of countries in April, the US administration had exempted phones, computers and other electronic products, even as the threat of a renewed tariff threat on these items looms large.
Section 232 of the Act allows the US President to restrict imports that threaten national security. Specifically, the Secretary of Commerce investigates imports and if it’s determined that those imports threaten national security, the President can impose tariffs or other restrictions. The term “national security” is not defined in the statute.
At present, smartphone imports into the US from India attract no customs duty, but India levies a 16.5 per cent tariff on such exports from the US. Smartphone makers have urged New Delhi to drop these tariffs, as they are worried it could irk the US administration, which could impose fresh duties on these imports. Sources said that as part of India’s ongoing negotiations with the US for a bilateral trade agreement, New Delhi has agreed to reduce this duty to zero.
“There is a review meeting (on Section 232 exemptions) in the next two weeks, and we will have better clarity after that. The Commerce Ministry will negotiate for status quo,” a senior government official said, requesting anonymity.
Since Trump has taken office, the US has launched investigations under Section 232 of its Trade Expansion Act of 1962 in sectors like semiconductors and pharmaceuticals, to determine whether imports in these industries could have national security implications for Washington.
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The Indian Express had earlier reported that India’s share in US smartphone imports surged to nearly 36 per cent in the first five months of 2025, from about 11 per cent in 2024. China, which continues to dominate the product category, saw its share drop from 82 per cent to 49 per cent over the same period.
US smartphone imports from India jumped by over three times year-on-year to 21.3 million units between January and May this year, according to data from the US International Trade Commission (USITC). In value terms (CIF), imports of Indian-made smartphones increased 182 per cent y-o-y to $9.35 billion, already higher than around $7 billion in the whole of 2024.
In May, Apple CEO Tim Cook had said the company expects most iPhones sold in the US in the April-June quarter to have India as their country of origin. Roughly 20 per cent of Apple’s global iPhone production capacity is now based in India.
Meanwhile, China exported 29.4 million smartphones to the US between January and May — a 27 per cent y-o-y drop — valued at around $10 billion. China (49 per cent) and India (36 per cent) were followed by Vietnam with 8.3 million units exported, accounting for a share of 14 per cent.
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