Introduction
Over the last decade, India has significantly increased its electronics assembly and manufacturing capabilities and continues its efforts to drive the growth given the huge domestic demand and export potential. India’s electronics industry has grown significantly over the past decade, evolving from a small-scale sector to a global manufacturing hub. The Indian Government is actively working to make India a global manufacturing hub for electronics by introducing various schemes which attract both domestic and foreign companies to invest in the sector. In recent past, India has witnessed the electronic giants such as Foxconn, Samsung, and Apple set up large electronics manufacturing and assembly facilities in India. Over the years, the policy has successively evolved from promoting the manufacturing of finished electrical goods to manufacturing of parts and components with an aim to establish a complete ecosystem of electronic manufacturing in the country.
One of the tools in the hands of the Government to achieve this policy objective is customs duties and trade remedial actions which work to incentivize domestic manufacturing and address unfair trade. On the customs duties front, the annual budgets presented by the Government over the years have seen customs duties being increased on the imports of finished goods and successively on parts and components of finished goods. Apart from that, the Government in recent times has also stepped-up efforts to protect the electronics sector from imports of unfairly traded goods, particularly against imports from China.
This article briefly touches on the Government’s initiatives towards the development of the electronic sector in the country. Thereafter, the article focuses on the actions of the Indian Government to protect the Indian producers of electronic goods from unfairly priced imports through trade remedial actions like anti-dumping duties. The article closes by summarizing the importance of protecting the domestic producers in the electronic sector and highlights some actions by the developed countries like the European Union (EU) and the United States of America (USA) to protect their domestic producers in this sector.
Government’s promotion initiatives
The Indian Government has introduced the following illustrative schemes in last decade or so to promote the electronic manufacturing in the country as part of its Make in India program:
1. Production-Linked Incentive (‘PLI’) Schemes
2. Semiconductor Mission
3. Digital India
4. Startup & MSME Support
The PLI scheme facilitates in providing financial incentives to boost domestic production of specified electronic goods, such as, mobile phones and semiconductors with specified additional sales and export targets to encourage foreign and domestic companies to manufacture in India for catering domestic and export demand. The role of Semiconductor mission cannot be undermined as it aims to establish India as a global semiconductor and display manufacturing hub. The Digital India scheme promotes digital infrastructure and electronics adoption across sectors like education, healthcare, and governance. The Startup & MSME Support encourages innovation through funding and incubation centers for small and medium-sized enterprises (SMEs).
Government’s protection initiatives
The Government has not only promoted investments in the electronic sector but also actively protected it against the influx of imported unfairly priced electronic goods.
The Directorate General of Trade Remedies (‘DGTR’) under the Ministry of Commerce is tasked with the responsibility to conduct trade remedial investigations on applications filed by the domestic producers in India and thereafter recommend imposition of trade remedial duties (like anti-dumping or ADD and countervailing duties or CVD) to the Ministry of Finance (‘MoF’). In this context, the DGTR recently recommended Anti-Dumping Duties (‘ADD’) on imports of Soft Ferrite Cores from China PR.[1] In 2023, the DGTR also recommended ADD on imports of Printed Circuit Boards (‘PCB’) from China PR and Hong Kong which were imposed by the MoF on 14 March 2024.[2] Both the DGTR and MoF exercise their powers under the trade laws to use trade remedy measures to correct the domestic prices of unfairly traded imports affecting the economic interests of the domestic producers of specified goods and the country at large.
The PCBs form basic component of any electronic device and is a backbone for any electronic device. The Indian government imposed ADD of about 30% on imports of PCBs from China and Hong Kong.[3] The imposition of ADD on PCB has gone a long way in protecting the domestic industry of PCB in India which otherwise did not have any protection of custom duties because PCBs (Tariff heading 8534) are covered under the India’s commitments for zero duty under the Information Technology Agreement (ITA), a plurilateral agreement enforced by the World Trade Organization (WTO).
The DGTR recently also recommended ADD on imports of Soft Ferrite Cores from China. Soft Ferrite Cores are used in applications such as RF transformers, Switch Mode Power Supplier (SMPS), ferrite loop sticks antennas, electric vehicles, electric vehicles’ chargers, mobile chargers, LED drivers, telecommunication devices, solar panels, etc. The recommended ADDs range between 30-35% pursuant to a full-fledged investigation by the DGTR. The protection comes on the backdrop of India’s intention to strengthen the Indian ferrite industry as the Electronics Manufacturing Cluster (EMC 2.0) scheme of the Government also intends to make India as an electronics manufacturing hub to drive the growth of ferrites market. The Indian ferrites industry has gained importance over the years due to the society’s paradigm shift towards 5G infrastructure, the rollout of smart city initiatives, and electric vehicles manufacturing which is amplified due to environmental concerns. With the advent of Internet of Things (IoT) and 5G technology in India, the demand for semiconductor chips has risen which supports the need for the protection of ferrites industry in India. The market size of ferrites is targeted to increase manifold by the year 2033 and India is aimed at gaining a recognizable spot in the entire global ecosystem of the market.[4]
Conclusion
The Government of India’s schemes like PLI and EMC have gone a long way in attracting investments in the electronic sector in India. At the same time, protecting India’s domestic industry from unfairly priced imports is the goal of an anti-dumping measure, and it is the duty of the DGTR, as a wing of the Ministry of Commerce, to create a level playing field for the domestic manufacturers. By recommending ADDs on PCB and Soft Ferrite Cores, the DGTR has amplified its standing on safeguarding the Indian market from the low-priced imports that impede the domestic production.
The foreign jurisdictions such as the EU have also been active in protecting its electronics industry by taking recourse to the trade remedy measures. One of the recent (January 2025) cases in point is that of the European Commission (EC) imposing ADDs on imports of Mobile Access Equipment (MAE) from China.[5] In another case, the EC imposed definitive countervailing duties in 2024 on imports of battery electric vehicles (BEVs) from China for a period of five years.[6]
The USA has recently in 2024 released its preliminary findings on imports of Crystalline Silicon Photovoltaic Cells, whether or not assembled into modules from Cambodia, Malaysia, Thailand, and Vietnam into the USA[7] as part of the steps taken by the US Government’s to impose ADD and CVD duties and limit the unfairly priced imports of these products injuring the US solar cells industry.
It must be kept in mind that the aim of any ADD/CVD measure is not to restrict or prohibit the imports of subject goods but to correct the prices in the domestic market by imposing necessary duties so that the imports that are below the fair market price of a country gets imported at fair prices and not pose a threat to a the domestic producers in the importing country. Such measures not only restrict unfairly priced imports but also boost the confidence of the local manufacturers to enhance their production and expand their market presence. The electronics manufacturing industry in India needs the government’s support from promotion and protection measures to decrease its dependence on imports and cement India’s stake in the global supply chain of electronics.
[The author is an Associate Partner in International Trade & WTO practice at Lakshmikumaran & Sridharan Attorneys, New Delhi]
[1] Final Findings dated 23 December 2024 in the Anti-dumping Investigation Concerning Imports of Soft Ferrite Cores Originating in or Exported from China PR.
[2] Final Findings dated 29 December 2023 in the Anti-dumping Investigation Concerning Imports of Printed Circuit Boards (PCBs) Originating in or Exported from China PR and Hongkong
[3] Anti-dumping Investigation Concerning Imports of Printed Circuit Boards (PCBs) Originating in or Exported from China PR and Hongkong (the individual participating producers from China were awarded duties in the range of Nil % to 75% depending upon their injury and dumping margins). Duties were imposed on bare PCBs of up to six layers with certain exclusions of high-end PCBs.
[4] Soft Ferrite Core Market Size, Demand & Industry Outlook 2023-2033.
[5] https://policy.trade.ec.europa.eu/news/commission-moves-protect-eu-mobile-access-equipment-industry-dumped-imports-2025-01-09_en#:~:text=Today%2C%20the%20European%20Commission%20imposed,across%20eight%20EU%20Member%20States.
[6] https://ec.europa.eu/commission/presscorner/detail/en/ip_24_5589.
[7] Inv. No. 701-TA-722-725 and 731-TA-1690-1693.
