India Becomes Top Smartphone Exporter to US, Beats China

Photo : Reuters

India has achieved a major milestone in the global smartphone industry by surpassing China to become the leading exporter of smartphones to the United States. This is the first time India has outpaced China in one of the world’s most competitive technology markets, marking a significant shift in global manufacturing dynamics.

The Shift in Numbers

According to global tech market analysis firm Canalys, India accounted for 44% of all smartphone exports to the US between April and June 2024. In sharp contrast, China’s share of exports to the US dropped to just 25%—a dramatic fall from over 60% during the same period in 2023. Vietnam, which has also emerged as a key manufacturing hub, stood at second place.

This shift is largely attributed to Apple's strategic move to diversify its manufacturing base and reduce reliance on China, particularly amid ongoing geopolitical tensions and trade uncertainties between the US and China.

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Apple’s Big Bet on India

Apple has been gradually increasing its production in India over the past few years through its contract manufacturers like Foxconn, Pegatron, and Wistron. By assembling iPhones locally, Apple not only reduces its exposure to Chinese tariffs but also benefits from Indian government incentives under the Production Linked Incentive (PLI) Scheme.

The result is a tripling of Apple’s smartphone shipments from India to the US in just one year. Though Apple’s overall iPhone exports from India dipped slightly this quarter—down 11% from the previous quarter—analysts believe this is due to early stockpiling by Apple and not a slowdown in demand.

Early Shipments, But Slow Consumer Demand

Industry experts like Runar Bjorhovde, an analyst at Canalys, noted that Apple had shipped large volumes of iPhones earlier in the year to maintain its market presence. However, while availability remains high, consumer demand has been slow to match, growing only 1% during the quarter.

This may be due to inflation concerns, cautious spending habits, and consumers delaying upgrades, especially in North America where the average smartphone replacement cycle has grown longer.

Global Manufacturing Landscape is Changing

The shift in smartphone production away from China is part of a larger trend of “China +1” strategy, where global tech companies look to diversify their supply chains to other countries such as India, Vietnam, Mexico, and Indonesia. The goal is to reduce over-dependence on one country and minimize risks from political tensions or trade restrictions.

India, with its vast workforce, improving infrastructure, and government incentives, has become a preferred alternative. The country is not only assembling iPhones but also seeing increased interest from other global brands like Samsung, Xiaomi, and Google to establish or expand their manufacturing bases.

Political and Economic Reactions

This shift in smartphone production has not gone unnoticed in the US political arena. Former President Donald Trump, a vocal critic of outsourcing, has criticized Apple for not building phones in the US and has renewed calls to bring manufacturing jobs back home.

In response, Apple has committed to investing $500 billion in the US economy over the next four years, mainly through infrastructure, software development, and hiring. However, the company still manufactures the bulk of its smartphones overseas, primarily in China and now increasingly in India.

What This Means for India

India’s emergence as a top smartphone exporter to the US is more than just a trade statistic—it is a major vote of confidence in the country’s manufacturing ecosystem. It positions India as a serious contender in high-tech manufacturing and could lead to more job creation, foreign investment, and technological development.

This shift also strengthens India’s role in the global electronics supply chain, especially as the world seeks more resilient and diversified production networks after disruptions caused by the COVID-19 pandemic and US-China trade war.