Global trade just hit a wall—and it’s made of tariffs. On March 5, 2025, President Donald Trump told Congress, “Whatever they tariff us, other countries, we will tariff them. That’s reciprocal, back and forth,” igniting a policy shift that’s shaking the electronics industry to its core. By April 2, the U.S. slapped steep duties on key manufacturing hubs: 54% on China, 46% on Vietnam, and a relatively modest 27% on India. For OEMs, this isn’t a distant headline—it’s a wake-up call to rethink supply chains built on decades of stability.
The stakes are high. Electronics manufacturing—from Printed Circuit Board Assemblies (PCBA) to box builds and battery packs—relies on precision, cost, and speed. Tariffs now threaten all three, pushing companies like Apple and Foxconn to pivot fast. India, with its lower tariff burden and ambitious manufacturing goals, is stepping up as a contender. This blog unpacks how tariffs are rewriting the rules, why India could be the next hub for OEMs, and what you need to know to navigate this seismic shift.
Tariffs Disrupt the Old Playbook
The U.S. tariff rollout is a gut punch to traditional supply chains. China, the world’s electronics factory, faces a 54% levy, layered atop a 50% semiconductor tariff from Biden’s tenure. Vietnam’s at 46%, Thailand’s 36%, and Taiwan’s 32%. “The costs of their products are going to go up significantly,” warns Neil Shah of Counterpoint Research, signaling higher prices for everything from smartphones to EV battery packs. For OEMs, the math no longer adds up—sourcing components like BMS chips or lithium cells from China is a losing game.
The response is swift. “Apple might import more iPhones from India to side-step China tariffs,” TechCrunch notes on X, a move echoed by Foxconn and BYD shifting to India and Mexico. This isn’t just about dodging costs—it’s about survival. Battery pack assembly, for instance, feels the heat as Chinese cells get pricier, forcing manufacturers to rethink where PCBA and EMS happen. “Major component assembly—including camera modules and battery cells—has seen increasing investment in India,” says Lori Chang of Isaiah Research, hinting at a broader realignment. The old playbook—build in China, ship to the U.S.—is crumbling.
India’s Moment in the Spotlight
India isn’t just dodging the worst of the tariff storm—it’s seizing the opportunity. “India stands out as the alternative that not only moves assembly out of China geographically but also delinks from Chinese ownership structures,” a report highlights, setting it apart from Vietnam or Taiwan. At 27%, India’s tariff is a lifeline compared to China’s 54% or Vietnam’s 46%. “Steep new US tariffs threaten to erode cost competitiveness in key electronics manufacturing hubs,” says MAIT, making India’s edge undeniable.
The shift is already underway. Smartphones, India’s export star, are leading the charge, with 60% of shipments to the U.S. being iPhones. “The order book for US supplies will go up from both existing brands and newer ones,” predicts Dixon Technologies’ CEO Atul Lall, thanks to India’s tariff advantage. Policy fuels this fire: Budget 2025 slashed duties to 0% on PCBA inputs and battery fabrication goods, while the PLI scheme draws giants like Samsung to Noida. “The rationalisation of tariffs on key inputs creates a more competitive cost structure,” says Pankaj Mohindroo of ICEA, opening doors for OEMs.
Battery Packs and the India Advantage
Battery packs—powering EVs, IoT, and consumer gadgets—crystallize India’s potential. With China’s 54% tariff jacking up cell costs, India’s 27% burden looks like a bargain. “Increasing investment in India” for battery components is clustering supply chains, Chang observes. Tamil Nadu’s export boom—from $1.66 billion in FY2021 to $9.56 billion in FY2024—shows how “China Plus One” strategies favor India. Here, PCBA for BMS, box build enclosures, and EMS testing can thrive under one roof.
This isn’t theoretical. “EMS and ODM firms in India will see OEMs actively requesting an expansion of their production lines,” Chang predicts, a trend spanning battery packs to telecom gear. India’s ability to handle high-density PCBA, rugged box builds, and compliance testing (e.g., UL standards) aligns with battery pack needs—thermal management, durability, and safety. “Support will be provided to develop domestic manufacturing capacities,” Finance Minister Nirmala Sitharaman pledged, signaling a long-term play.
Opportunities for OEMs to Act
India’s rise is a goldmine for OEMs willing to move fast. “Global firms may increasingly turn to India as a preferred alternative for new factories,” MAIT forecasts, especially in consumer electronics and IT hardware. Dixon expects U.S. revenues to hit Rs 4,500-5,000 crore this year, up from Rs 1,700-1,800 crore, driven by tariff gaps. “India can tap into packaging, testing and lower-end chip manufacturing,” GTRI suggests, if infrastructure scales. For OEMs, this means cheaper PCBA, streamlined box builds, and EMS with a tariff-friendly twist.
The window is narrow but real. “Analysts point out that India’s electronics manufacturing services sector may benefit from global supply-chain shifts,” an X post notes, as U.S. tariffs dwarf those on India. “The long-term outlook for the country is favourable,” says Bob O’Donnell of TECHnalysis Research, if India neutralizes tariff impacts. From battery packs to 5G routers, India’s ecosystem is ready to scale—OEMs just need to plug in.
Hurdles India Must Clear
India’s not a slam dunk. “Without building capacity, how can we truly benefit from these tariff shifts?” asks Biswajit Dhar, pointing to infrastructure gaps—logistics, power, ports—that lag behind China’s machine. Small manufacturers, hit by a 27% tariff, face “high logistics costs and trade infrastructure challenges,” Dhar adds. India’s $12 billion in electronics imports from China in FY2024 exposes reliance on high-value parts like semiconductors.
Competition is fierce. Saudi Arabia and the UAE, at 10% tariffs, and the Philippines, at 17%, wield SEZs and labor advantages. India’s R&D spend—0.64% of GDP versus China’s 2.41%—limits innovation. “The next 6-8 weeks will be crucial,” a senior executive warns, as India negotiates a U.S. trade deal to cement its edge. OEMs must weigh these risks against the rewards.
Karkhana.io: Your Partner in India’s Rise
As tariffs flip the electronics supply chain script, Karkhana.io stands ready to anchor OEMs in India’s ascent. With a 100,000 sq. ft. manufacturing floor, 7 SMT lines, and 5 through-hole lines, Karkhana.io delivers turnkey solutions—from PCBA to box builds—handling everything from component sourcing to logistics. “We provide end-to-end EMS with a turnkey approach,” their ethos states, backed by high-speed SMT machines, X-ray inspection, and a Class 100K clean room. For battery pack OEMs, their expertise in high-density PCBA and rugged box builds meets thermal and safety demands head-on.
Certified across industries (ISO 9001, IATF 16949, ISO 13485), Karkhana.io serves automotive, IoT, and consumer electronics with 100% traceability and real-time process control. “The US’s protectionist tariff regime could act as a catalyst for India to gain,” says Ajay Srivastava of GTRI, and Karkhana.io’s 600+ supplier network and ERP-driven inventory management make it a linchpin. For manufacturers, this isn’t just a trend—it’s a reset. Partner with Karkhana.io to turn India’s 27% edge into your competitive advantage—your supply chain’s future starts here.