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Chinese electronics components manufacturers, panicked by the tariff war with the US, are offering to drop prices by up to 5% as Indian companies start negotiating fresh sourcing contracts. This is a significant concession as the segment operates on low margins of 4-7% and could boost their own savings by 2-3%, fridge, TV, and smartphone makers said. The Indian manufacturers could pass on some of the lower costs to consumers to stimulate demand.On average, three-fourths of all parts used in electronics products in India are imported from China.The US-China tariff war has significantly slowed fresh orders to Chinese manufacturers as global supply chains are reset following reciprocal tariffs imposed by the US, with the highest on China at 125%. Lower US demand for Chinese electronics goods will dampen demand for components as well. "Component manufacturers in China are under pressure," said Kamal Nandi, head of the appliance business at Godrej Enterprises Group. "Prices will be renegotiated as export orders from the US slow down."120138358The electronics industry operates on a two-three-month raw material inventory cycle. Companies will place fresh orders from May-June onward. India's FY24 electronics component imports rose 36.7% to $34.4 billion from the year earlier, according to a recent GTRI report. They were up 118.2% over the last five years from $15.8 billion in FY19. Oversupply Issue China's companies there are getting hit by oversupply, said Avneet Singh Marwah, chief executive of television contract manufacturer Super Plastronics."There is panic. US export shipments from China are on hold. Indian companies and Chinese part makers are negotiating to lower prices by up to 5%," said Marwah, who has the India licence for Kodak, Thomson and Blaupunkt. "However, since domestic demand in India is not robust, companies may pass some as discounts." Electrical and electronic equipment counted as the largest category of US imports from China in 2024, totalling $127.06 billion.Chinese suppliers are also facing demand issues in India as production-linked incentives, quality control orders (QCOs) that need to be obtained from the Bureau of Indian Standards before sourcing items from overseas and a gradual increase in import duties on components have started encouraging local production. According to the India Cellular and Electronics Association, India aims to grow its components and sub-assembly manufacturing to $145-155 billion by 2030, with the government notifying the Electronics Component Manufacturing Scheme on Tuesday. To be sure, India currently imports most critical electronic components such as chips, compressors, inner grooved copper tubes, open cell television panels, printed circuit boards, battery cells, display modules, camera modules and flexible printed circuits.Electronics manufacturer Dixon Technologies' managing director Atul Lall said there will be a slowdown and a demand crunch in the US, which will lead to a price reduction on components. Dixon refreshes its component inventory every 15-30 days. Mobile phone market tracker Counterpoint Research director Tarun Pathak said smartphone component pricing will also decline due to oversupply, although not all parts are fungible."Brands may partly pass it on or absorb it, depending on inventory position. Almost 75% of the smartphone components used in India are imported from China," Pathak said.

China's Ministry of Culture and Tourism on Wednesday issued a risk alert for Chinese citizens planning to visit the United States, citing the recent decline in China-US economic and trade ties, as well as concerns over domestic security in the US, according to a report by Global Times. The ministry's official website advised travellers to thoroughly evaluate potential risks and exercise caution when making travel plans to the US.China announced on Wednesday that it will increase its tariff on US goods from 34 per cent to 84 per cent starting April 10.The decision came after the United States increased tariffs on China to a whopping 104 percent following US President Donald Trump's threat of "additional 50 percent tariffs" on Beijing starting Wednesday, Al Jazeera reported.Trump had announced an additional 50 per cent tariff on China after Beijing announced 34 per cent tariff on the United States in tit-for-tat response.Trump had said if China did not withdraw its 34 per cent increase in 24 hours, the United States would impose additional tariffs and all talks with China concerning their requested meetings will be terminated.The 50-point rise in tariff by China mirrors the additional 50 per cent tariff introduced by the US.Beijing announced the tariffs after the White House on Tuesday (local time) announced the imposition of a 104 per cent tariff on China starting Wednesday, marking a significant escalation amid the tariff tension which have shaken the markets.On Sunday, Trump threatened an additional 50 per cent hike in tariffs on China following Beijing's 34 per cent retaliatory tariff hike after Trump's announcement of reciprocal tariffs during Liberation Day on April 2.China decried the US tariffs imposed on the country as "groundless" and called them a unilateral bullying practice, as per a spokesperson from China's Ministry of Commerce.