Smartphone and earbud makers import more components from Vietnam as domestic prices surge

Components such as displays and camera modules, and even Bluetooth earbuds, are imported from Vietnam at zero duty (file photo)
| Photo Credit:
MOHAMMED YOUSUF

Amid a nearly fivefold spike in memory chip prices over the past year, electronics manufacturers, especially smartphone and true wireless stereo (TWS) earbud makers, have increased imports from Vietnam, a trend that sources say is expected to accelerate this year.

Industry sources told businessline that, with import duties on most items from Vietnam at zero under the India-ASEAN Free Trade Agreement, companies have spent the past year taking advantage of the duty-free structure to bulk-import smartphone components and other electronics.

“Components such as displays and camera modules, and even Bluetooth earbuds, are imported from Vietnam at zero duty. Interestingly, most of these importers are Chinese companies with manufacturing or assembly units here,” an industry veteran told businessline.

Supporting this, government data show that India’s imports of electronics from Vietnam rose 9.5 per cent year-on-year (y-o-y) to $5,364.61 million in FY26, from around $4,896 million in FY25. In FY24, imports grew 16.1 per cent to $4,504 million, up from $3,879 million in FY23.

“The government is not earning any revenue either from the manufacturing of these items or through customs duties. In a way, this has become a rerouting of goods: instead of importing from China, companies are importing from Vietnam,” he said, adding that such a trend could also affect the country’s manufacturing policies.

Without naming the companies, he said some were directly importing TWS earbuds from Vietnam because it was much cheaper than manufacturing them in India. Some had even set up manufacturing units in Vietnam instead of India, he noted.

“In India, setting up a display manufacturing unit under the Mobile Phone Manufacturing Scheme (MPMS) and the Electronic Components Manufacturing Scheme (ECMS) offers 4 per cent incentives. But if you can import the same product from Vietnam at zero duty, why would you set up a manufacturing unit here? Importing would offer much better margins,” he explained.

Importing electronics from Vietnam to India involves preferential tariff rates under the ASEAN–India Trade in Goods Agreement (AITIGA). Provided the goods meet specific Rules of Origin and are accompanied by a valid Certificate of Origin, standard MFN tariffs—which typically range from zero to 20 per cent for most electronics — can be side-stepped, and the preferential tariff benefits availed.

Published on October 25, 2026