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London
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For the first time India has overtaken China as the No. 1 exporter of smartphones to the United States, following Apple’s tariff-driven manufacturing pivot to New Delhi.
India-made devices accounted for 44% of smartphone imports in the US during the second quarter, up sharply from 13% during the same period last year, according to a new report published Monday by research firm Canalys.
The total volume of smartphones made in India jumped 240% year-over-year, Canalys wrote.
Meanwhile, the share of the devices exported to the US that were assembled in China fell to just 25%. That marks a significant decline from the 61% share China logged during the same quarter a year ago — and it means China has dropped all the way to third place, behind Vietnam.
India’s newfound lead is “largely driven” by US tech giant Apple (AAPL) accelerating its manufacturing shift to the country, away from China, given the “uncertain trade landscape” between Washington and Beijing, said Canalys principal analyst Sanyam Chaurasia.
“Apple has scaled up its production capacity in India over the last several years… and has opted to dedicate most of its export capacity in India to supply the US market so far in 2025,” he wrote.
That said, Apple is still “dependent” on its established manufacturing bases in China, Chaurasia noted.
Smartphones and other electronics containing semiconductors are exempt from US President Donald Trump’s so-called reciprocal tariffs, sparing China-made iPhones from the harshest levies. But Apple CEO Tim Cook said in May that these devices still faced a minimum 20% tariff.
At the time, Cook said that he expected that “the majority of iPhones sold in the US will have India as their country of origin.”
Trump hopes to fuel a resurgence in US-based manufacturing by hiking tariffs on America’s trading partners, leaving products made in foreign factories more expensive for US consumers.
China has arguably taken the biggest hit. Earlier this year, Trump imposed a whopping 145% overall tariff on China, prompting Beijing to retaliate with its own 125% across-the-board levy on US goods. Both sides agreed in May to drastically roll back “reciprocal” tariffs for a 90-day period.
US and Chinese trade negotiators are meeting in Sweden this week for talks aimed at extending that truce, which could allow time to hammer out a lasting deal. But despite the recent détente, months of Trump’s rollercoaster on-and-off tariffs have encouraged manufacturers to look beyond China.
It extends a longer-running trend of companies attempting to diversify their supply chains away from China, the world’s second-largest economy. In recent years, fast-growing Asian economies like Vietnam and India have emerged as alternative locations for manufacturers as ties between Beijing and the West have frayed.
During the pandemic, too, China’s strict zero-Covid policy scrambled global supply chains and highlighted the risks of concentrating production in a single location.
“The uncertain outcome of negotiations with China has accelerated supply chain reorientation,” analysts at Canalys wrote in their report.
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