With the ongoing US-China trade war intensifying, Indian consumers could see a noticeable drop in prices of electronic goods such as TVs, refrigerators, and smartphones. Chinese manufacturers, hit by high US tariffs and declining demand, are now aggressively exploring partnerships with Indian companies. This shift is creating room for potential price reductions in the Indian market.
Lower Prices Ahead
According to industry insiders, Chinese suppliers have expressed readiness to reduce component prices by up to 5 per cent. Given that the typical profit margins in this sector range between 4-7 per cent, this reduction is significant. Indian companies anticipate saving around 2-3 per cent in costs, which they may pass on to consumers in the form of lower retail prices, thereby boosting domestic demand.
Trade War and Global Supply Chain Shakeup
The global supply chain is undergoing a massive shift as the US has imposed tariffs as high as 145 per cent on Chinese goods. This has led to a slump in export orders from the US for Chinese firms. Kamal Nandi, Business Head at Godrej Appliances, noted that the downturn in American demand has put immense pressure on Chinese component manufacturers, prompting potential renegotiations of pricing for exports to other markets like India.
Oversupply Hurting Chinese Firms
As per the Economic Times report, Chinese electronics firms are grappling with oversupply issues due to reduced global demand. Avaneet Singh Marwah, CEO of Super Plastronics, commented on the financial strain facing these companies. He stated that market conditions are chaotic, with some companies likely to offer discounts to stimulate sluggish Indian demand.
Indian Market Dynamics
India imports nearly 75 per cent of its electronic goods from China, making it a significant player in this equation. However, policy changes in India—like increased import duties, stricter quality controls, and the Production-Linked Incentive (PLI) scheme—are helping boost domestic manufacturing. The Cellular and Electronics Association of India has set an ambitious target of growing the industry to USD 145–155 billion by 2030.
A New Opportunity for Indian Firms
As Chinese firms look for new markets and pricing flexibility, Indian companies stand to benefit from more competitive component costs. This, in turn, could not only improve their profit margins but also offer Indian consumers more affordable tech options, potentially revitalizing demand across the electronics sector.
