In a significant shift, India surpasses the United States as the leading importer of smartphones, with Apple spearheading the exit of Chinese manufacturers from the market.
In a significant move, tech giant Apple has started retooling some of its production lines in India, marking a strategic shift in its supply chain management. This move is primarily driven by the need to mitigate risks from U.S.-China trade tensions and reduce dependence on a single manufacturing country.
The shift to India is part of Apple's "China Plus One" strategy, aiming to diversify production bases and avoid uncertainties related to tariffs and geopolitical conflicts. This strategic move also includes frontloading inventory to prepare for potential tariffs in 2025, reflecting a cautious approach to supply chain management amid an unpredictable trade landscape.
India's growing manufacturing capabilities and favourable policies have enabled this increased production volume. In fact, India now accounts for the largest share of smartphones shipped to the U.S., overtaking China for the first time, signalling a significant operational shift in Apple's supply chain.
Apple's partners, such as Foxconn India and Tata Electronics, have been instrumental in this expansion, with the assembly of higher-end models like the iPhone 16 Pro now taking place in India.
The trend clearly favours India as a growing manufacturing base for the U.S. market, although Apple still relies on China for some production to meet full demand. However, India-based electronics suppliers like China's Agilian Technology are expanding their facilities in India, suggesting a promising future for India as a manufacturing hub for various electronics, not just smartphones.
This shift is not exclusive to Apple. Samsung has also recorded a 38% increase in exports to America from India, led mainly by its Galaxy A-series. Vietnam has also surpassed China, accounting for 30% of US smartphone imports in Q2 2025.
However, the manufacturing efficiency in India remains behind China's. This, coupled with the US President Donald Trump's trade policies, such as a suspended 26% tariff on Indian smartphone imports (effective Aug 1), may complicate India's long-term leadership.
Despite these challenges, the majority of smartphones shipped from India are headed for US consumers, according to Canalys. Total smartphone shipments to the U.S. increased only 1% in Q2 2025, indicating weak demand in an uncertain economic climate.
Apple, with nearly 70% of all smartphones shipped out of India, is a significant factor in India's smartphone export boom. This strategic shift towards India is a testament to Apple's de-risking strategy amid continued US-China tensions, signalling a new era in global supply chain management.
References:
- Apple shifts iPhone production to India to diversify supply chain
- India Overtakes China as Top Exporter of Smartphones to the US
- Apple's iPhone 14 production line to be set up in India
- Apple Accelerates Supply Chain Shift to India Amid U.S.-China Tensions
The strategic move by Apple to set up production lines in India, as outlined in "Apple shifts iPhone production to India to diversify supply chain," is part of a broader de-risking strategy that also involves the technology and business sectors. This strategy aims to avoid uncertainties related to tariffs and geopolitical conflicts, as reflected in "Apple's China Plus One strategy."
In the coming years, India's growing manufacturing capabilities and favorable policies, as detailed in "India Overtakes China as Top Exporter of Smartphones to the US," could make it a significant hub for various electronics manufacturing, including smartphones and higher-end models like the iPhone 16 Pro. This shift could reshape the global landscape of technology and business, especially in terms of supply chain management.
