India Surpasses China as Top Smartphone Manufacturing Hub for US Market in 2025

Highlights

• Global Shift: India now supplies 36% of US smartphone imports, up from 11% in 2024, surpassing China’s declining share.

• Economic Impact: India’s smartphone exports to the US reached $14.4 billion in H1 2025, fueled by Apple and Samsung.

• Government Support: The “Make in India” initiative and PLI schemes drive double-digit growth in local manufacturing.

In a landmark shift, India has surpassed China to become the leading manufacturing hub for smartphones sold in the US market in Q2 2025. This development marks a pivotal moment in global technology supply chains, with India capturing 36% of US smartphone imports, a dramatic rise from 11% a year ago. Meanwhile, China’s share has plummeted from 61% to 25%, reflecting a significant reconfiguration driven by geopolitical tensions, tariff pressures, and strategic diversification by major players like Apple and Samsung.

Why India? The Driving Forces

The surge in India’s smartphone manufacturing is no accident. Several factors have converged to position India as a global leader in this sector:

Geopolitical and Tariff Pressures

US-China trade tensions, including tariffs as high as 54% on Chinese imports, have pushed manufacturers to seek alternatives. India, with a 27% duty rate, offers a cost-competitive option, despite production costs being 5-8% higher than in China. Apple, in particular, has accelerated its supply chain shift, with factories in Tamil Nadu and Karnataka producing iPhone 15 and 16 models for the US market. This “China Plus One” strategy has made India the primary beneficiary, with exports growing 240% year-on-year in Q2 2025.

Government Initiatives: Make in India and PLI

The Indian government’s “Make in India” campaign and Production-Linked Incentive (PLI) schemes have been instrumental. These policies provide financial incentives, tax breaks, and streamlined regulations, encouraging global manufacturers to establish or expand facilities in India. In 2024, mobile phone exports reached $14.5 billion, with projections of $50 billion by 2025-26, driven by a 62% CAGR over the past decade. The PLI scheme has also reduced import dependency from 78% in 2014 to just 3% in 2024, fostering self-sufficiency.

Robust Manufacturing Ecosystem

India’s manufacturing landscape has evolved significantly, with over 200 mobile phone production facilities now operational. Companies like Foxconn, Tata Electronics, and Dixon Technologies have scaled up operations, with Tata recording a 107% YoY growth in 2024, primarily driven by iPhone production. Samsung, the top manufacturer in India, saw a 7% YoY increase, supported by its Noida facility. This ecosystem is bolstered by a young, skilled workforce and a massive domestic market of 1.4 billion people, with nearly half aged 15-29, driving demand for technology products.

Key Players and Market Dynamics

Apple and Samsung dominate India’s smartphone export market, accounting for 94% of exports in 2024. Apple alone shipped 23.9 million iPhones to the US in H1 2025, a 53% YoY increase, contributing $14.4 billion in export value. Samsung’s growth is driven by its Galaxy A and S25 series, with a 13% YoY export increase. Other players like Vivo, Xiaomi, and OPPO are also expanding, with Vivo capturing a 14% shipment share in 2024 through offline retail growth.

Apple’s Strategic Pivot

Apple’s shift to India is a cornerstone of this trend. The company’s decision to produce standard and Pro models of the iPhone 15 and 16 series in India, covering 44% of US-bound shipments in Q2 2025, reflects a strategic response to tariff risks. This move has not only reduced Apple’s reliance on China but also positioned India as a critical hub in its global supply chain. However, this shift drew criticism from former US President Donald Trump, who threatened additional tariffs unless Apple produced domestically, highlighting the complex interplay of global trade policies.

Samsung’s Steady Growth

Samsung’s Noida facility, one of the largest in the world, has been pivotal in maintaining its position as India’s top smartphone manufacturer. The company’s focus on both premium (S25 Ultra) and budget-friendly (A-series) devices has ensured broad market appeal, with exports to markets like the UK, Middle East, and South America growing steadily.

Economic and Social Impacts

The rise of smartphone manufacturing in India has far-reaching implications:

Economic Growth and Job Creation

The sector has created approximately 1.2 million jobs, with projections of 280,000-300,000 additional jobs in the next 12-16 months. Mobile phone production reached $49.55 billion in FY24, contributing significantly to India’s GDP. The industry’s growth also stimulates related sectors like component manufacturing, software development, and retail, creating a multiplier effect. By 2030, electronics manufacturing, led by mobile phones, is expected to help double India’s GDP from $3.7 trillion to $7 trillion.

Global Supply Chain Resilience

India’s emergence as a manufacturing hub reduces global reliance on China, enhancing supply chain resilience amid geopolitical uncertainties. The country’s 20% share of global smartphone manufacturing in 2025, up from 4.7% in 2022, underscores its growing influence. This shift also mitigates risks associated with tariff hikes and supply chain disruptions, as seen during the COVID-19 pandemic.

Challenges Ahead

Despite its success, India faces challenges in sustaining this momentum:

• Component Dependency: India still relies on imported components, limiting local value addition. Developing a robust domestic supply chain is critical.

• Skill Gaps: While India has a large workforce, upskilling is needed to meet the demands of advanced manufacturing processes.

• Global Demand Volatility: A projected 1% decline in global smartphone output in 2025 due to tariff impacts and economic uncertainties could affect export-driven growth.

Future Outlook

India’s smartphone manufacturing sector is poised for double-digit growth in 2025, with a projected 20% share of global output. Continued government support, including PLI expansions and trade policies, will be crucial. Investments in local component ecosystems and workforce training can further reduce import dependency and enhance competitiveness. As consumer demand for premium and 5G-enabled devices grows, India’s ability to produce high-quality smartphones at scale will solidify its position as a global tech leader.

Conclusion

India’s ascent as the leading smartphone manufacturing hub for the US market in 2025 is a testament to its strategic vision, robust policies, and dynamic workforce. With Apple and Samsung leading the charge, supported by government initiatives like “Make in India,” India is not just a manufacturing hub but a global tech powerhouse. As the country navigates challenges like component dependency and global demand fluctuations, its focus on innovation and resilience will shape the future of the smartphone industry. This milestone is a beacon of India’s economic potential and a signal to the world that “Made in India” is here to stay.