US' 90-day tariff pause 'key' window, India must act decisively: ICEA

The US' 90-day pause on reciprocal tariffs for countries, including India, creates a critical strategic window for New Delhi to accelerate efforts in attracting electronics manufacturing investments, particularly from companies seeking to diversify their production bases beyond China, a country which now stares at 125 per cent American levy, according to the industry.

US President Donald Trump has declared a three-month pause on reciprocal tariffs on non-retaliating countries marking a rather unexpected U-turn after record high levies he imposed led to global stock market meltdown that erased trillions of dollars in investor wealth, and spooked nations and businesses. 

Trump has, however, made it clear that he would raise tariffs on China, one of America's biggest trading partners, to a staggering 125 per cent after Beijing vowed a fresh round of retaliation. For other countries, the rates will revert to baseline 10 per cent.

Pankaj Mohindroo, Chairman of ICEA (India Cellular and Electronics Association) said it is important to recognise that other nations, notably Vietnam, are also poised to benefit from this tariff suspension, and emphasised that "India must act swiftly and decisively".

"This pause creates a critical strategic window for India to accelerate our efforts in attracting electronics manufacturing investments, particularly from companies seeking to diversify their production bases beyond China. ICEA is committed to supporting the government in swiftly facilitating the relocation of these production lines to India," he said.

He cautioned that delays in leveraging "this favorable period" may result in "missed opportunities", as companies may opt for alternative destinations that offer more immediate advantages. 

"At the same time, we must continuously strive to enhance our global competitiveness and proactively address structural disabilities," he said. ICEA, Mohindroo said, stands ready to collaborate closely with the government and industry stakeholders to ensure that India becomes the preferred destination for electronics manufacturing investments during this critical timeframe.

According to ICEA, the US administration's recent announcement of a 90-day pause on reciprocal tariffs is a welcome move.

"We appreciate the Government of India for not responding hastily, and instead adopting a calibrated approach that reflects a strategic understanding of the opportunities presented. However, we also note that a baseline tariff of 10 per cent remains in effect on imports from most countries, including India," he said while urging for an action-oriented approach.

Ashok Chandak, President of India Electronics and Semiconductor Association (IESA) believes the temporary relief on tariffs gives businesses and India vital space to stabilise supply chains and adapt operations, while also providing policymakers an opportunity to work toward more sustainable trade agreements.

"While this pause opens the door to reassess global trade dynamics, underlying tensions and uncertainty persist due to the existing 10 per cent baseline tariff on most US imports and what comes after 90 days," Chandak said.

US' 90-day pause on tariffs for India and several other countries reflects a tactical recalibration rather than a fundamental policy shift, he said adding, "it's a welcome development from both US consumers and global geopolitics perspectives".