U.S. Tariffs on India Set to Double Amidst Talk of 100% Semiconductor Tax

The current U.S. administration announced an additional 25% tariff on imports from India today, bringing the total taxes on the country to 50%. The move was framed as a penalty for the country’s purchase of oil from Russia, according to an executive order signed on August 6th. 

India has 21 days to respond before the new tariffs go into effect. Separately, the administration also threatened a 100% tariff on foreign semiconductors, which would be unveiled as early as next week. Join us as we explore these new developments and their implications for electronics manufacturers around the globe. 

India Responds, Calling New Tariffs ‘Unfair, Unjustified, and Unreasonable’ 

In a statement from India’s ministry of external affairs, the country referred to the new tariffs as “unfair, unjustified, and unreasonable,” going on to say that “India will take all actions necessary to protect its national interest.

India also accused the U.S. of double standards since other countries that import Russian oil have not faced similar penalties. Even so, experts say the economic impact will be sizable across sectors like textiles, ready-made clothes, auto-components, steel, and gems. 

The automotive industry in India alone exports $7 billion in auto parts to the U.S. annually, accounting for 32% of total shipments from the country in FY25. 

These new tariffs would also put India at a distinct disadvantage compared to regional competitors like Vietnam, Bangladesh, and China. 

“This is a severe setback. Nearly 55% of our shipments to the US will be affected,” said SC Ralhan, President of the Federation of Indian export organizations. 

Electronics Remain Exempt, but for How Long? 

India is the second-largest mobile phone manufacturer globally, and a major hub for Apple’s iPhone production. Will these new tariffs have an effect on this aspect of manufacturing? At the moment, the answer is no, but the future is uncertain. 

As of this writing, products like smartphones, computers, and other electronic devices remain exempt from the reciprocal tariffs. However, alongside the newly announced India tariffs this week, the current administration also threatened a 100% tariff on foreign semiconductors. 

Such a tariff could be unveiled as soon as next week, and would apply to all countries and companies unless they commit to invest and build in the United States. 

Given the ubiquitous nature of semiconductors in nearly all electronics designs, such a move could have its widespread ripple effect, so say nothing of how it would affect India’s growing semiconductor industry. 

The Only Certainty is Uncertainty

Throughout 2025, it has become clear that tariff uncertainty will persist. With new policy shifts happening every month, organizations need to have external intelligence to properly monitor and proactively address shifts in lead times, inventory, and pricing. 

Supplyframe is helping organizations navigate tariff uncertainty with access to purpose-built solutions and industry-leading real-time intelligence on all major electronics commodities. Learn more at Supplyframe.com.