India overtakes China in smartphone exports to the U.S.

By Admin

30 Jul, 2025

India has officially surpassed China to become the leading exporter of smartphones to the United States, marking a significant milestone in the global tech manufacturing landscape. According to recent data from research firm Canalys, smartphones assembled in India accounted for 44% of U.S. smartphone imports in the second quarter of 2025 up from just 13% during the same period last year. In stark contrast, China’s share dropped dramatically to 25%, down from 61% a year earlier, while Vietnam captured 30%, also surpassing China.

A Shift Fueled by Tariffs and Trade Uncertainty

The change in export dynamics comes amid rising trade tensions between the U.S. and China. With the U.S. government imposing higher tariffs on Chinese goods and urging American companies to diversify their supply chains, many tech giants have accelerated their relocation plans. Apple, in particular, has been at the forefront of this shift.

“The surge in shipments from India was primarily driven by Apple’s accelerated shift toward the country amid heightened U.S.-China trade uncertainty,” said Sanyam Chaurasia, Principal Analyst at Canalys. This marks the first time India has exported more smartphones to the U.S. than China, signaling a pivotal transformation in global manufacturing hubs.

Apple Leads the Way

Apple has been reportedly fast-tracking its plans to assemble a majority of its iPhones for the U.S. market in India. The company aims to manufacture around 25% of all iPhones in the country within the next few years. In the second quarter alone, the volume of smartphones assembled in India increased by a staggering 240% year over year.

This move comes after former U.S. President Donald Trump threatened Apple with additional tariffs and urged the company to shift iPhone manufacturing to domestic soil an idea widely seen as impractical due to cost and infrastructure limitations. Although Apple secured temporary exemptions for several of its products, including iPhones and MacBooks, officials cautioned that the relief might not last.

Other Tech Giants Follow Suit

While Apple’s relocation strategy is well underway, other global smartphone manufacturers like Samsung Electronics and Motorola have also begun shifting some of their assembly operations to India. However, their efforts remain modest in scale and slower in pace compared to Apple, according to Canalys.

“Many global manufacturers are now increasingly allocating their final assembly lines to India to cater to the U.S. market,” said Renaud Anjoran, EVP at Agilian Technology. The Guangdong-based electronics manufacturer is currently renovating a facility in India, aiming to start trial production runs soon.

Challenges Remain

Despite the growing interest in Indian manufacturing, companies face significant hurdles. One key concern is the lower yield rates a measure of manufacturing efficiency in India and Vietnam compared to China. These operational inefficiencies could impact production timelines and overall output quality in the short term.

Market Impact and Future Outlook

While smartphone shipments are an indirect measure of demand, they still offer valuable insights into market trends. According to Canalys, iPhone shipments to the U.S. declined 11% year over year to 13.3 million units in Q2, reversing the previous quarter’s 25.7% growth. On a global scale, Apple saw a 2% drop in iPhone shipments, amounting to 44.8 million units during the April–June period.

Amid these challenges, Apple’s stock has dropped 14% this year, reflecting investor concerns over its exposure to trade policies and rising competition in both the smartphone and AI sectors.

Even as Apple begins assembling the iPhone 16 Pro models in India, China’s advanced infrastructure remains crucial for meeting U.S. demand, especially for premium models. The journey toward diversifying supply chains may be well underway, but it’s far from complete.

Trade Policies Still in Play

Adding to the complexity is the evolving tariff landscape. In April, Trump imposed a 26% tariff on imports from India, significantly lower than the triple-digit tariffs placed on Chinese goods. However, these duties were temporarily paused and are under review until an August 1 deadline, keeping exporters and manufacturers on edge.

Conclusion

India's rise as the top smartphone exporter to the U.S. underscores a seismic shift in the global manufacturing order, propelled by geopolitical tensions, trade policies, and corporate strategy. While this transformation is still unfolding, the signs are clear: India is fast becoming the new manufacturing frontier, and tech giants are taking note.