India–US Trade Deal Lifts EMS Stocks as Tariff Cut Improves Export Outlook
Indian electronic manufacturing services (EMS) stocks rallied sharply on February 3 after the United States reduced tariffs on Indian imports, improving earnings visibility and growth prospects for the sector.
Shares of Avalon Technologies surged 20% to hit the upper circuit at ₹1,022, marking their highest level in over two months. Syrma SGS Technology climbed 10.6% to ₹802.55, while Dixon Technologies and Kaynes Technology gained 7% and 8.3%, respectively. Other EMS players such as Amber Enterprises and PG Electroplast also advanced, rising up to 9% during the session.
The renewed buying interest followed reports that the US had lowered tariffs on Indian goods to 18% from 25%. In addition, the US is reportedly rolling back an extra 25% punitive duty imposed earlier in response to India’s crude oil imports from Russia. The move eased a key concern that had weighed on Indian equities in recent months and contributed to their underperformance compared with other Asian markets in 2025.
EMS Sector Seen as Key Beneficiary
Market analysts believe the tariff reduction could significantly boost India’s electronics exports to the US and help domestic manufacturers gain market share amid ongoing global supply chain diversification.
According to analysts, the EMS sector stands out as one of the biggest beneficiaries of the India–US trade developments. Improved tariff support and supply chain realignment could strengthen India’s position in smartphone assembly, semiconductor outsourcing and testing (OSAT), and electronics component manufacturing. This is expected to reinforce the ongoing production-linked incentive (PLI) cycle and support both listed EMS companies and their ancillary suppliers.
Experts also noted that lower tariffs may benefit other export-oriented sectors such as IT services, pharmaceuticals, electronics manufacturing, and defence-related manufacturing by improving access to the US market and supporting sustained demand.
Government Push Supports Sector Outlook
The positive sentiment around electronics manufacturing is further supported by recent policy announcements. In the Union Budget 2027, the government unveiled Semiconductor Mission 2.0, aimed at building a robust semiconductor and display ecosystem and positioning India as a global electronics manufacturing hub.
Additionally, the Electronics Component Manufacturing Scheme (ECMS) outlay has been expanded to ₹40,000 crore, highlighting the government’s focus on strengthening domestic manufacturing and reducing import dependence. Officials have also stated that India’s semiconductor design programme has reached a significant milestone, enabling stronger participation in the global chip industry.
Overall, analysts expect the combination of favourable trade developments and continued policy support to provide a structural boost to India’s EMS sector over the medium to long term.
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