India is now the largest smartphone exporter to the United States, surpassing China for the first. This marks a major shift in global supply chains as firms re-calibrate their production bases due to trade tensions.
Data from the research firm Canalys shows that smartphones made in India represented 44% of the total US imports during the quarter April-June, a sharp increase from 13% for the same time period in 2016.
According to Canalys, the total volume of smartphones produced in India has increased by 240% compared with a year ago.
Comparatively, China’s market share dropped from 61% to 25% during the same period.
Vietnam also exceeded China in supplying 30% US smartphone imports during the third quarter.
Apple shifts its focus to India amid US/China trade tensions
Sanyam Chaurasia is the principal analyst for Canalys. She said that the rapid rise in India shipments was due to Apple’s pivot towards the country as trade tensions escalated between China and the US.
India has now surpassed China as the largest smartphone exporter to the US.
Apple is increasing its efforts to manufacture a greater share of iPhones in India. It plans to produce roughly one-quarter of the total iPhone production in India over the next couple of years.
The announcement comes at a time when former president Donald Trump is seeking to return to power and has threatened to impose additional tariffs on Apple for failing to shift production more to the US.
The US reciprocal tariffs on Apple products, such as iPhones and MacBooks have been temporarily waived. However, these waivers are not likely to be extended past August 1.
India’s pivotal companies are not alone
Apple may be leading this transition but other smartphone manufacturers such as Samsung Electronics, Motorola and others are exploring the possibility of shifting to Indian assembly plants, although at a much slower rate and on a smaller scale.
Renauld Ajoran, CEO at China’s electronics company Agilian Technology said that a number of manufacturers have relocated their final assembly to India to expand capacity. This is to cater better to the US Market.
The company plans to start trial productions and then scale it up.
Anjoran stated in an article by CNBC that “the plan for India” is progressing as quickly as possible.
Before ramping up production to full scale, the company plans to start trial production soon.
The demand outlook is uncertain
Canalys reports that despite the increase in iPhone shipments in the second quarter, Apple’s worldwide iPhone deliveries fell by 11% on an annual basis to 13,3 million units.
The growth rate was down from 25% in the prior quarter.
Apple shares have dropped 14% in the past year due to concerns about trade and competition.
Canalys says that even though Apple is now assembling iPhone 16 Pro in India, the majority of Apple’s high-end products are still made in China.
The US tariff policy is still a work in progress. A 26% duty on Indian imports, imposed by the US government in April is still lower than duties placed at that time on Chinese products. These tariffs were paused but only for one month.
The post India surpasses China in smartphone exports to the US amid shifting supply chain may be updated as new information unfolds.
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