R Suryamurthy
India’s smartphone manufacturing sector is gaining attention as a potential winner in the wake of sweeping new U.S. tariffs on imports from 57 countries. With global tech giants like Apple and Samsung facing tariffs as high as 104% on devices made in China, India’s relatively modest 26% levy on exports to the U.S. positions it as a strategic alternative for production.
The tariffs, announced by the U.S. government on April 2, target a group of countries that together supply the majority of smartphones to the American market. China, which accounts for roughly 80% of iPhone production for the U.S., is now subject to a 104% tariff. Vietnam, a key hub for Samsung, faces a 46% tariff.
By comparison, India’s 26% tariff is significantly lower, offering a more favourable environment for Original Equipment Manufacturers (OEMs) looking to reduce exposure to the escalating trade conflict.
According to Counterpoint Research, India stands to benefit as companies seek to diversify their manufacturing footprints away from tariff-impacted regions. Neil Shah, Vice President of Research at Counterpoint, said: “India makes the most sense for now. If the country can address the technological readiness of domestic EMS partners, capex appetite, government support, and its ability to negotiate tariffs with the U.S., it can establish itself as a more favourable production destination.”
Apple, which already produces about 20% of its U.S.-bound iPhones in India, is expected to scale up operations further to offset the significant tariffs on Chinese manufacturing. However, analysts warn that a rapid transition depends on Apple’s strategic priorities, the capabilities of Indian partners, and the level of policy support from the Indian government.
Samsung, while heavily reliant on Vietnam, is also in a strong position to expand Indian operations. “With significant capacity in India, Samsung can shift production away from Vietnam more quickly than others,” said Tarun Pathak, Research Director at Counterpoint. “One of its two factories in India has excess capacity that can be scaled up.” He also noted that successful trade negotiations between the U.S. and South Korea could further bolster exports of premium Samsung models manufactured in South Korea.
Other brands like Motorola, reliant on Chinese ODMs, may also explore a pivot to Indian EMS (Electronics Manufacturing Services) partners. Even Google, which is gradually scaling its Pixel smartphone business, is expected to weigh India as a viable manufacturing base, depending on the strength and reliability of local partners.
Still, a large-scale production shift will not happen overnight. Jeff Fieldhack, Research Director at Counterpoint, cautioned, “Fundamental solutions such as relocating production bases require significant investment and time, and are unlikely to provide relief in the short term.”
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Complicating matters further is the potential for future tariff changes, making long-term planning difficult for OEMs.
In the near term, some manufacturers may look to non-U.S. markets or rely on pre-stocked inventory to navigate the immediate impact. But over the long run, a realignment of global production strategies seems all but inevitable.
The new tariffs offer India a rare window of opportunity to bolster its standing as a global electronics manufacturing hub. With the right infrastructure investments, policy reforms, and strategic partnerships, India could attract substantial new investment, mitigating tariff pressures for major brands and ultimately delivering more competitive pricing for consumers. The coming months will be crucial in determining how effectively India can seize this moment in the reshaping of global supply chains.
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