US copper tariff may impact Indian electronics, chip plans

Economic Times

6 days ago

Agencies President Donald Trump last week announced a steep 50% tariff on copper imports into the US, triggering an alarm across global supply chains and raising concerns in India's electronics and semiconductor industries.While the measure is primarily aimed at boosting domestic copper production in the US, Indian executives said the ripple effects could to some extent disturb India's chip and electronics manufacturing efforts under its semiconductor mission.
India's reliance on imported high-purity copper materials could become a serious bottleneck as global trade barriers proliferate and disrupt the supply chain, said industry leaders. They urge the Indian government to move swiftly — not just by streamlining import procedures and BIS certifications but also by investing in the domestic production of high-grade copper alloys and materials essential to the electronics and chip value chain.
Indirect blow 'Copper is critical for chip wiring, PCBs, interconnects, and power systems,' said Ashok Chandok, president of SEMI India and the India Electronics and Semiconductor Association (IESA). 'India imports a large share of its refined copper and concentrates. Even gold-plated copper wires used in outsourced semiconductor assembly and test units are facing procedural hurdles.'Copper is a critical raw material in electronic manufacturing, widely used in printed circuit boards (PCBs), capacitors, resistors, connectors, relays, and wiring for semiconductor packaging and assembly.
Domestic suppliers like Hindustan Copper, Sterlite, and Hindalco do not currently produce the semiconductor-grade copper needed at scale, the IESA president pointed out. Global supply issues and costlier components will increase the manufacturing cost and slow down cost-sensitive semiconductor projects, he said. 'India must not just incentivise fabs but also build upstream resilience — through domestic refining, free trade agreements, and even strategic reserves.'Semiconductors aren't directly hit by tariffs, said Kunal Chaudhary, partner and co-leader of the Inbound Investment Group at EY India. 'But disruptions in copper, critical for chip wiring, are pushing up costs and shifting policy focus. This is slowing India's chip momentum and making things more expensive for global supply chains." Though India has copper smelting and refining capacity, high-purity copper and specialty alloys required for advanced electronics and chipmaking are largely imported, often from countries like China, which offer competitive pricing and advanced processing capabilities. India's own steps, like requiring quality certification on imports, could also affect the industry.'India does not manufacture high-purity copper materials or the special alloys like strips, wires, or sheets required for semiconductors,' said Rajoo Goel, secretary general of the Electronic Industries Association of India. 'These are imported and supplied by a few specialised global manufacturers, many of them in China. Imposing trade barriers like tariffs, Quality Control Orders, or Bureau of Indian Standards certifications without enabling alternatives can disrupt this fragile but essential supply chain,' Goel said.India's semiconductor momentum is in its early stages and blocking imports through regulatory or pricing hurdles could discourage foreign investment and slow the growth, Goel said. 'We need to remove hurdles, not add new ones. Strengthening domestic copper processing will take time — and until then, strategic imports must be facilitated, not impeded,' he warned.India reportedly exported $2 billion worth of copper and copper products in 2024-25, including $360 million, or 17%, to the US. The US is India's third-largest market for copper exports after Saudi Arabia (26%) and China (18%). Any decline in US demands following new tariffs is likely to be absorbed by the domestic industry.'The semiconductor race is not just about fabs,' Chandok said. 'It's about the entire ecosystem — and that begins with secure, affordable, and quality raw materials like copper.' Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. The 10-second mystery: Did the Air India crash report hide more than what it revealed?
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