Chinese Electronics Parts Maker Slashes Prices for Indian Businesses Amid High Trump Tariffs

Chinese electronics and electrical components makers, including fridge, TV and smartphone manufacturers are offering discounts of up to 5% to Indian companies as negotiations for fresh sourcing contracts begin. This comes as a measure the Chinese companies are adopting to deal with US President Donald Trump’s tariffs heat, according to the Economic Times. 

The development comes at the time of uncertainty as trade war between the US and China have taken an aggressive route. Trump has recently halted tariffs imposed by it on all countries for 90 days except for Chinese imports, which is currently placed at 125%.  

The discounts would result in a significant savings for the Indian companies, as nearly three-fourth of all electronics components used in electronic products in the country come from China. The move also comes ahead of the time when fresh orders will be placed from May-June onwards.

Also Read: India's Ban on Trans-shipment Facility for Bangladesh's Exports- Not A Violation of WTO Norms, Says MEA Official

The electronics components segment usually operates on a low margin of 4-7%, with discounts offered. The savings for these Indian companies would be around 2-3%.  

An earlier report by the Economic Times mentioned that Chinese companies like Haier, Lenevo and Hisense are presently mulling to export products to the US via the Indian factory route to avoid high tariffs imposed on Chinese goods by US President Donald Trump. 

The Chinese electronics makers are eyeing the Indian government to relax rules on Indian manufacturing investments. The government’s 2020 press note restricts investments from countries that share a land border with India, including China. While on the other hand, a report by TOI highlighted that the Indian government is unlikely to ease investment restrictions on Chinese companies. Despite push from the Indian industry, the government so far has maintained a cautious stance on the subject.

Also Read: From Vedanta to Tata Steel, Metal Cos Most at Risk from Trump Tariffs – And Why

The push to ease FDI restrictions hasn’t just come from the Chinese government and Indian industry, but the same concern has been flagged by people within the Indian government. At an ASSOCHAM event, India’s Chief Economic Advisor (CEA), V Anantha Nageswaran, emphasised the need for greater partnership between the two neighbouring nations. 

“...So, one has to first resolve the question of, how do we integrate China into our supply chain, before we think about how to integrate ourselves in the global supply chain,” CEA Nageswaran had said.