Zero-tariff boosts India’s imports of electronic components from Vietnam

According to India's BusinessLine, electronics manufacturers, particularly makers of smartphones and true wireless stereo (TWS) earbuds, have stepped up imports from Vietnam as memory chip prices have nearly quintupled over the past year.

Industry sources expect the trend to continue gaining momentum this year.

Citing Indian government data, BusinessLine reported that the value of India’s imports of electronic goods from Vietnam reached US$5.36 billion in fiscal year 2025-26, up 9.5 percent from approximately $4.9 billion a year earlier.

Imports of these products had previously reached $4.5 billion in fiscal year 2023-24, up 16.1 percent from $3.88 billion in fiscal year 2022-23.

According to several industry sources, many companies have taken advantage of zero import duties on eligible goods from Vietnam to bring in large volumes of smartphone components and other electronic products over the past year.

A veteran industry expert said components such as screens, camera modules and even Bluetooth earphones were being imported from Vietnam at zero tariffs.

The expert said most importers were Chinese companies with manufacturing or assembly facilities in India. Rather than importing directly from China, these businesses are increasingly sourcing components from Vietnam.

Some companies have also been importing TWS earbuds directly from Vietnam because doing so is significantly cheaper than manufacturing them in India. Others have even opted to build factories in Vietnam instead of India.

Under the ASEAN-India Trade in Goods Agreement (AITIGA), electronic goods imported from Vietnam may qualify for preferential tariffs if they meet rules of origin requirements and are accompanied by valid certificates of origin (C/Os).

This mechanism allows eligible products to enjoy preferential rates instead of most-favored-nation (MFN) tariffs, which generally range from 0 to 20 percent for most electronic products.

Investing in screen manufacturing facilities in India under production incentive schemes may qualify companies for incentives of 4 percent. By contrast, importing the same products from Vietnam at zero tariffs could offer higher profit margins without requiring companies to invest in factories in India.