In the second quarter of 2025, India overtook China as the top supplier of smartphones to the US for the first time, a milestone driven primarily by Apple’s shift in production away from China.
In July, Canalys revealed that smartphones assembled in India accounted for 44 per cent of the 27.1 million units shipped to the US in Q2, up from just 13 per cent a year earlier. Meanwhile, China’s share plummeted from 61 per cent to 25 per cent. Perhaps more pertinently, the analyst house found made-in-India smartphones shipped to the US surged 240 per cent year-on-year in the same quarter, with Apple accounting for the bulk of the growth.
India’s rise as a global smartphone manufacturing powerhouse has led to inevitable comparisons with China, the world’s second-largest economy. Ekta Mittal, senior analyst for connected devices at CCS Insight, told Mobile World Live that the South Asian country’s ascent as a manufacturing hotbed “marks a critical turning point, positioning India on the global map as an export hub rather than just a local assembly base.” But what does a realignment of global supply chains look like amid intensifying geopolitical pressures?
Analysts argue the shift in global handset production has been years in the making, after the Covid-19 pandemic exposed the fragility of a China‑focussed supply chain. “The supply chain challenges intensified during the pandemic, highlighting an over reliance on China as a primary manufacturing centre,” noted Neil Shah, VP of research at Counterpoint. “This situation prompted many economies and companies to recognise the importance of diversification, leading to the adoption of a China+1 strategy for manufacturing semiconductors, components, and finished products.”
Mittal echoed this sentiment, highlighting that sustained trade tensions amplified this trend. “Supply constraints during the pandemic made it clear that companies can no longer rely on a single country,” she stated, adding that mounting trade friction between the US and China in recent years in part driven by President Donald Trump’s tariff policies “further accelerated this shift”.
India takes the lead
As a result, India is now “contributing to almost one in four phones being manufactured globally”, Shah noted. Samsung, Motorola, Google and OnePlus are amongst a slew of players expanding their US-focused production lines in India. UK-based smartphone maker Nothing is also betting on India, both as a consumer market and as a manufacturing hub as co-founder Akis Evangelidis told Economic Times this week, “We want to be building from India to the world… because we see India as basically what China was 10 years ago.”
Recent developments signal an even deeper strategic shift; last month, Karnataka Industries Minister MB Patil confirmed in a post on social media platform X that Foxconn, Apple’s key manufacturing partner, commenced production of the latest iPhone 17 series at its newly established unit in the South Indian city of Bengaluru, marking its largest facility outside of China. Meanwhile, Bloomberg reported that Apple is set to manufacture the entire US-bound lineup of iPhone 17 models directly from the South Asian country for the first time.
Apple’s diversified production strategy comes in a bid to sidestep tariffs on Chinese exports imposed by Trump administration. In its Q3 earnings call, CEO Tim Cook warned that tariff-related costs are increasing, rising from $800 million in fiscal Q3 to an anticipated $1.1 billion in the current quarter. Earlier this year, Trump threatened a 25 per cent tariff on iPhones not made in the US, reportedly warning Cook, “We are not interested in you building in India”.
Yet, in August, sources told Times of India that Apple “does not intend to slow down expansion plans and investments” in the world’s most populous country. In Shah’s view, India is the most attractive China+1 destination for the iPhone maker due to its “more open tech ecosystem, attractive government policies, lower labour costs and abundance of English speaking, young engineering talent”.
India’s growth also has been aided by proactive government incentives and the participation of domestic players such as Tata Electronics in the supply chain ecosystem, Mittal explained. But according to her, India’s importance in the iPhone maker’s long-term strategy will persist regardless of geopolitical tensions. “While tariff uncertainty still lingers, even if Trump rolls back the tariffs, we believe Apple will continue to expand its manufacturing in India,” she said.
China still holds the key
While India’s ascent has captured global attention, analysts contend that China remains a central player in the smartphone supply chain. Its established ecosystem, vast manufacturing infrastructure and domestic consumer market continue to anchor production for both Chinese and global brands. Mittal cautioned against overestimating India’s rise, warning that it remains “heavily reliant” on China for imports of critical components including batteries, display panels, memories and cameras. “For now, China still holds the keys to India’s smartphone supply chain,” she noted. Shah also highlighted that while countries such as India and Vietnam are scaling sophisticated manufacturing, China will remain the “bedrock” of the global supply chain for the foreseeable future, especially for Chinese brands, original design manufactures (ODMs) and electronic manufacturing services (EMS) providers.
It is clear that while tech players are vying to pursue a diversified manufacturing strategy, full decentralisation is unlikely in the near term. Shah pointed out that most markets outside China are still limited to semi-knocked-down (SKD) or less sophisticated manufacturing, with only a few, like India and Vietnam, capable of high-end, completely knocked-down (CKD) production at scale. For instance, Vietnam, which houses a bulk of Samsung’s production, ranked second behind India in Canalys’ report, with a 30 per cent share of US-bound smartphone shipments in Q2. Although this global shift may have boosted supply chain resilience and challenged China’s dominance, its long-established value chain and competitive edge will still prove tough to overtake.
Growing uncertainty
The transition also brings broader risks. “Tariff pressures and the ongoing shift in manufacturing can result in temporary hiccups,” Mittal said, as companies scramble to build a fully localised ecosystem outside China. These higher costs “are likely to be passed on,” potentially pushing up prices for new devices. She also pointed to lingering uncertainties, such as China’s potential to restrict component exports and the unpredictable nature of global trade policies.
These shifting dynamics are already visible in market performance. Total smartphone shipments to the US grew just 1 per cent in Q2 2025. Apple’s shipments fell 11 per cent to 13.3 million units, while Samsung posted 38 per cent annual growth, driven by its budget-friendly Galaxy A-series. According to Canalys analyst Runar Bjorhovde, the iPhone maker frontloaded inventory in anticipation of new tariffs, yet the market’s muted overall growth “highlights tepid demand in an increasingly pressured economic environment”.
In an increasingly uncertain geopolitical climate, it is clear that the global smartphone supply chain is in a state of transition where it is no longer centred on China, but not yet free from its grip. Looking ahead, “execution and supply consistency will be critical, especially as China may use its dominance in component supply to slow this transition,” Mittal concluded. India seems to be emerging not just as a China+1 destination, but as a central node on the global smartphone manufacturing map, where politics are arguably as important as pricing.
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