US tariffs have either crimped margins or disrupted exports for Indian cable and telecom equipment makers, even as the data centre boom drives demand in the American market.
Operating margins narrowed for Sterlite Technologies Ltd (STL), while exports contracted for HFCL Ltd, Polycab Ltd, Havells India Ltd and RR Kabel Ltd since the US President Donald Trump imposed stiff tariffs, according to the management commentary over the past two quarters.
Tariffs are depriving Indian cable and internet gear makers of a major opportunity, with American companies awarding orders worth billions of dollars to build infrastructure for artificial intelligence (AI) companies. The US government is also expected to execute the 2021 $42.45 billion Broadband Equity, Access and Deployment (BEAD) programme to expand high-speed internet access.
Trump has imposed the highest 50% tariffs on India, including a 25% penalty for buying Russian oil. While sectors like pharmaceuticals and semiconductors have been exempted, many manufactured goods, including cables, telecom hardware inputs, and engineering products, are subject to the levy.
Margin hit, lower shipments
The impact has been most pronounced at STL, a key supplier of the optical fibre cable.
“The US tariff reset, effective mid-quarter two of FY26, created a temporary headwind, reducing reported Ebitda (earnings before interest, taxes, depreciation and amortization) by almost 760 bps (basis points) in quarter three of the current fiscal and bringing the reported margins to 10.3%,” Ajay Jhanjari, group chief financial officer at STL, said during an analyst call last week.
In the previous quarter, too, the company attributed a 300-bps contraction in their margins to the US tariffs.
Jhanjari said STL is passing on some of the tariffs to customers and aggressively ramping up production at its US facility. “We still remain hopeful of early resolution of the India-US bilateral trade agreement, which will provide a clear path for further margin expansion.”
So far, STL has not been able to scale production at its South Carolina facility.
Still, North America’s share in STL’s revenue increased to 36% from 25% in the current financial year, the management said, attributing it to the data-centre buildouts and demand for high-fibre-count cables.
STL’s competitor HFCL said it has been able to cushion itself.
“With relevance to certain US court decisions and customs ruling, we have been able to minimise a tariff impact on HFCL, that much I can say,” Mahendra Nahata, promoter and managing director, told analysts during the earnings call for the second quarter in October. “So there is very minimal impact on HFCL's exports, which are mostly optical fibre cable to the US.”
The company has yet to declare its earnings for the October-December quarter.
Cables and wires maker Polycab was already grappling with higher costs of copper and aluminium between September and December. US tariffs further dampened its revenue and margins.
“The year 2025 marked a pivotal phase for the global economy, defined by shifting trade dynamics and heightened geopolitical and tariff-related uncertainties,” chief financial officer Niyant Maru said in the third-quarter analyst call on 16 January. “Elevated US tariffs disrupted the established supply chain and moderated global growth.”
Shashank Yagnik, the company's strategy head, said tariffs weakened exports to the US. “This remains a global overhang and is impacting players worldwide, not just in India. We are currently awaiting a final resolution on this matter.”
In FY25, Polycab’s international cables business clocked ₹1,345 crore in sales, contributing 6% to its turnover. The business reported a “modest” contraction during the year, according to its annual report.
Cable maker RR Kabel also flagged a 2 percentage point decline in its share of exports to 6% in the second quarter ended September, owing to the tariffs, according to its earnings call with analysts on 3 November.
For Havells India, export growth was “very good” in the fiscal ended March (FY25). “This year, unfortunately, we have been hit by the tariffs, and there is lesser demand from the US market, which is turning out to be a good export market for Havells cables as well,” said Anil Rai Gupta, chairman and managing director of Havells India, during an earnings call with analysts on 19 January.
Hopes alive
Industry executives and analysts expect exports to the US to rebound and hope that the potential India-US trade deal will lower the tariffs.
“There is an opportunity for the Indian telecom and fibre cable industry in the US market. The market will continue to stay bullish as there is a lot of demand for data centres, backhaul, and consumer broadband,” said Siddhant Cally, research analyst at Counterpoint India. Indian companies supplying to the US will be affected by the tariffs, but a delayed profitability is better than no profitability, Cally said.
India continues to retain a relative cost advantage, although this has narrowed post-tariffs, according to him. “Over the medium term, vendors that localize manufacturing or final assembly in the US will be better positioned to mitigate tariff exposure and protect margins, while simultaneously ensuring that growth across other global markets continues to scale and diversify revenue streams.”
Polycab is banking on a hybrid business model in the US by selling both through distributors and directly to large institutional customers and easing trade route challenges to shore up cable exports. The company is positive about its strong global order book, driven by increased cable demand from the renewables, power infrastructure, oil & gas, and data centre sectors, according to its FY25 annual report.
Havells India plans to bolster brand-building efforts in the US and the Middle East. The company’s international business contributed about 3.7% of its overall revenue in FY25, according to its annual report.
“I think cables present a very good opportunity for exports as well. It can provide us a good hedge against some sort of demand neutralization within the country in the coming years,” said Gupta. “So we are on that process. We are tracking well.”
Gupta said the company will continue exploring more export markets for the underground cable business.