Supply chain diversification shields Indian EMS firms from US tariffs

Indian electronics manufacturing service (EMS) firms are proactively recalibrating their supply chains and diversifying outbound flows to offset the prospective impact of impending US tariffs. Industry leaders said blended supply chain models and strategic geographic expansion are key to maintaining resilience in a changing global trade landscape.

Nearly a month after the 50% US tariffs came into effect on August 27, electronics and semiconductors remain exempted products for now.

Syrma SGS, a Mumbai-headquartered EMS provider, faces short-term marginal impact from the steep US tariffs according to managing director Jasbir Singh Gujral. Gujral told ET its current American exports represent just 5% of revenue, but permanent tariffs could potentially affect expansion plans and push Syrma SGS to evaluate new manufacturing sites outside India, such as Mexico or West Asia.


While Syrma SGS has felt minimal direct disruption so far, Gujral said any escalation in tariffs could reshape export and investment strategies, especially for scaling US-bound business beyond the current Rs 200 crore volume.

Meanwhile, Syrma SGS has contingency arrangements with US-based partners and anticipates clearer tariff guidance within the next two months. The company’s only offshore facility is in Germany, focusing on design prototyping and assembly for local clients.

“It’s not just the US—geographies worldwide are implementing protectionist supply chain measures. For manufacturers like us, diversification is essential, and each electronics category may require a different supply chain blend. Delivering the right blend is a matter of readiness and responsiveness,” said Josh Foulger, president of Zetwerk’s electronics business.

Zetwerk has factory presences in both India and the US and that has helped insulate the company from tariff shocks, he said.

“At an electronics level, today we don't have much exposure,” Foulger said. The blended supply chain will be the new normal going forward as it reduces risk. He added that certain categories of modules may be manufactured in India or elsewhere, with higher value addition handled in the US, helping offset the impact of tariffs or protectionist measures.

Zetwerk also has active operations in Europe. “We need to recalibrate supply chains to support our customers and be prepared for shocks or changes,” Foulger said.

Rajoo Goel, secretary general, Electronic Industries Association of India (ELCINA), told ET that US tariffs are destabilising electronics manufacturers, but the impact varied depending on the product and market mix of the manufacturer.

"There would be immediate impact, and companies have to diversify and find alternate markets and suppliers," he said.

However, he pointed out that drastic measures like establishing facilities outside India to gain advantage of lower tariffs assume that these tariffs will stay for a long time.

"It is better to dissect the problem and find solutions for each piece. This would dampen the impact of these tariffs and give time to wait and watch," he said.