The India–US bilateral commerce deal is being seen as a catalyst for deeper expertise and semiconductor collaboration, strengthening India’s position throughout chip design, backend manufacturing, and superior electronics provide chains.
US President Donald Trump stated on Monday that the nation will decrease reciprocal tariffs on Indian items to 18 per cent from 25 per cent and take away non-tariff boundaries, whereas India will ease its personal commerce restrictions and enhance imports of US power, expertise, and agricultural merchandise beneath a bilateral commerce settlement.
In accordance to Tarun Pathak, the director of Counterpoint Analysis, semiconductor ambitions profit from larger belief and smoother commerce in expertise, whereas initiatives like ICET on important and rising applied sciences will regain momentum. Engineering items, one in every of India’s largest export classes, spanning auto-components and electrical gear, additionally stands to gain from this improved commerce local weather.
In 2022, the U.S.–India partnership inaugurated the Initiative on Essential and Rising Know-how (iCET), targeted on cooperation in semiconductors, AI, quantum computing, wi-fi communication, particularly for defence and safety purposes.
Remodeling the Relationship Using Strategic Know-how (TRUST) is the advanced type of iCET. Introduced in 2025, TRUST retains iCET’s core give attention to semiconductors, AI, quantum applied sciences, and expands into domains like important mineral provide chains, biotechnology, power, and house applied sciences.
Ashok Chandak, President, SEMI India and IESA, echoed that the India–US commerce deal generally is a main catalyst for India’s electronics, semiconductor, and tech ecosystem.
“By enhancing market entry, enabling smoother stream of capital gear and superior applied sciences, and—when complemented by the iCET and TRUST—strengthening trusted provide chains and deepening expertise collaboration, the settlement enhances India’s attractiveness as a worldwide manufacturing and innovation hub. It would speed up semiconductor design and manufacturing, enhance electronics worth addition, and increase cooperation throughout AI, information centres, and superior manufacturing, creating high-skill jobs and positioning India as a dependable accomplice within the international expertise worth chain,” he stated.
The $500 billion bilateral commerce goal might translate into greater than $100 billion in commerce for the electronics and semiconductor sector.
For US chip firms, reassessing supply-chain focus dangers, price predictability, and long-term economics is important, shared Shetal Mehta, Co-founder, Suchi Semicon.
“Semiconductor companies are diversifying meeting and testing operations past conventional hubs. Indian Outsourced Semiconductor Meeting and Take a look at (OSAT) services at present provide scalable capability, enhancing yields, and high quality programs aligned with worldwide requirements. A clearer tariff framework reduces friction in industrial negotiations and permits structured discussions round quantity commitments and long-term partnerships. This coverage shift improves India’s possibilities of being included in multi-year backend manufacturing packages fairly than short-term pilot engagements. It helps larger utilization of home OSAT capability, encourages contemporary capital funding, and strengthens India’s position in international semiconductor provide chains,” he said.
Decrease US tariffs might also enhance the industrial viability of Indian-designed chips as American firms reassess sourcing methods.
Nikul Shah, Co-founder & CEO, IndieSemiC, defined that Indian fabless companies possess robust design expertise, area experience, and price effectivity. Improved tariff economics make collaboration with US clients extra sensible and aggressive.
The choice to get rid of tariffs on US expertise imports might grant higher entry to semiconductor IP, EDA instruments, and design ecosystems, enabling Indian firms to transfer past mature nodes towards extra advanced and application-specific designs. This helps deeper engagement with US OEMs and Tier-1 suppliers.
“The mixed coverage atmosphere encourages Indian design firms to take part earlier in product improvement cycles fairly than functioning as outsourced execution companions. Over time, this strengthens India’s place in high-value chip design, will increase export-oriented IP creation, and helps the transition from services-led to product-led semiconductor innovation,” he stated.
(with inputs from Sindhu Hariharan)
Printed on February 3, 2026
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