India-US Trade: Non-Tariff Barriers Key for Semiconductor Success

New Delhi, Apr 11 (PTI) While tariff is important, the bilateral trade agreement between India and the US should focus more on non-tariff barriers, a top official of Semiconductor Industry Association said on Friday.

India can have a higher share in the USD 600 billion semiconductor market if it plays the cards right, Semiconductor Industry Association (SIA) President and CEO John Neuffer said during a panel discussion at Global Technology Summit organised by Carnegie India.

"As we think about our bilateral future and our cooperation within the BTA (bilateral trade agreement), we shouldn't over-index on the tariff piece of it. There's no doubt about it, that's really important, but more emphasis needs to be given to the non-tariff barriers. That's been talked about in Washington quite a bit. There's customs problems, there's siting regulations that need to be streamlined," Neuffer said.

India and the US are holding discussions for a bilateral trade agreement (BTA) to rationalise import taxes in the respective countries.


While the US has exempted semiconductors from the tariff, it has proposed to impose reciprocal tariffs on several countries, including India. The US government has proposed to levy a 26 per cent duty from July 9 on all imports from India.

Neufffer said that India has done a lot right things for the semiconductor sector.

"As India thinks about the next step in this area, I think there are many links on our supply chain that should be turned to. One of them is continuing the assembly test packaging piece of this. The other piece that's not talked about enough is India should look at printed circuit boards. That's an important part of our supply chain. Then, finally, critical minerals," he said.

He said that the present era is about diversification of supply chains which will provide opportunity for a lot of players around the world and India in particular.

"Our semiconductor market size right now is about USD 600 billion a year in sales because of AI, automotive, and many other sectors demanding our chips. We're probably going to be a trillion-dollar sector by 2030. So, the pie is getting bigger overall, and if India plays its cards right, its piece of pie will become even bigger," Neufffer said.