Impact of the US–China Trade War on the Indian Electronics Market: A Case Study of Import Substitution and Price Fluctuations (2018–2021)

Abstract

The escalating trade tensions between the United States and China from 2018 to 2021 had profound global repercussions, influencing trade patterns, supply chains, and pricing structures well beyond their borders. This case study investigates the ripple effects of the US–China trade war on India's electronics market, with a specific focus on import substitution strategies and price volatility. As India is a net importer of electronic components, largely from China, the study probes into how Indian firms and policymakers reacted to the resultant disruptions and whether these reactions spurred genuine import substitution or merely short-term adjustments. Utilising secondary data from trade reports, government publications, industry white papers, and interviews published in business media, this paper examines the trajectories of key players such as Micromax, Lava, and Reliance Jio. The study observes a noticeable push towards self-reliance in the Indian electronics sector, catalysed by both international tensions and domestic initiatives such as “Make in India” and Production-Linked Incentive (PLI) schemes. However, it also highlights the structural limitations of domestic capability, revealing that while there was a partial localisation of final assembly units, the core dependence on imported components persisted. The study also analyses how end-consumer prices fluctuated due to supply chain constraints, increased input costs, and currency depreciation.