In August of 2025, the current U.S. administration imposed a 50% reciprocal tariff on numerous Indian goods, including electronics, as part of its ongoing trade strategy. This decision, like many other tariffs issued in 2025, could have major effects on global supply chains.
While trade talks have shown that this number may go down in the near future, India still has some of the highest import tariffs on electronics compared to other countries like Vietnam, Thailand, and Mexico.
Join us as we explore how these new shifts in global trade policy could affect the supply chain, as well as the engineering, sourcing, and procurement professionals within it.
3 Potential Impacts of New Tariffs on India
In response to the shifting trade landscape, India has made strategic adjustments to support its own domestic manufacturing. These include removing import taxes on key components like camera modules and PCBs.
New tariffs like the ones imposed on India have both immediate and ongoing effects. Here are five ways this change could affect electronics industry professionals:
1) Increased Supply Chain Complexity
Many of the tariffs are on essential raw materials like aluminum, gold, lead frames, and other essentials like solder paste and epoxy compounds. This impacts the bottom line of companies across industries since these materials are used in all electronics designs.
Furthermore, many companies import and export parts and assemblies as part of the manufacturing process. They may have aspects of a design manufactured in a country like China before importing those assemblies to their main facility for final production.
Each time components or parts are shipped across country lines, tariffs must be paid. This can result in a significant increase in costs throughout the entire manufacturing process.
And, given the complexity of modern supply chains, it’s not a simple process, either. One change can have a ripple effect, which is why tariffs have such a significant impact. In fact, some data suggests they could be as disruptive as COVID-19.
2) New Supplier Negotiations
One of the first impacts of new tariffs is the need for procurement teams to negotiate new contract terms with suppliers. This is done so that tariff clauses can be added to the agreement to decide who absorbs costs and how that manifests in the overall pricing structure.
Known as risk-sharing agreements, these negotiations are incredibly important, but will often result in shared cost pressure for both parties. Depending on the number of components affected, teams will have to do this with multiple suppliers as well, adding more pressure to teams that are already stretched thin.
3) Strategic Shifts
Beyond cost increases, tariffs have a real and measurable impact on the structure of global supply chains. For example, organizations will quickly seek out alternate sources of supply in other countries to mitigate risk.
Instead of sourcing sub-assemblies from a country like India exclusively, they may choose to seek out a supplier in Vietnam, Thailand, Mexico, or elsewhere where tariffs aren’t as high. Another strategy is nearshoring, which involves moving the final assembly or sub-assembly closer to the end market.
Procurement teams will look at the country of origin for parts as well to properly calculate the final cost of production. This pushes teams to leverage scenario planning and simulations to better understand the full scope of both cost and risk in the supply chain.
Every time a new tariff is announced, this process begins over again, which illustrates the impact these trade policy shifts can have on the global electronics value chain.
The Bottom Line: Stay Aware and Agile
In 2025, the only certainty is uncertainty. Teams must be agile and aware of potential shifts in the supply chain, and tariffs are certainly part of this. Perhaps the best way for teams to achieve this is to have access to real-time intelligence on the parts in their BOM.
With Findchips, teams can monitor pricing, inventory, country of origin, and more, all of which are constantly updated. Alternates that match form, fit, and function are also available, allowing engineering and procurement teams to collaborate effectively on part selection and risk mitigation.
Visit Findchips.com today to give your teams the competitive edge they need to navigate tariff risk and uncertainty.