India Can Become Preferred Destination For Smartphones Manufacturing The country needs to scale up local manufacturing, especially by India-based contract manufacturers
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"To mitigate potential cost increases arising from geopolitical uncertainties, vendors globally will be eyeing India as a preferred manufacturing destination. This will require efforts to scale up local manufacturing, especially by India-based contract manufacturers, ensuring India to evolve as a global manufacturing hub," said Upasana Joshi, senior research manager, devices research, IDC Asia Pacific.
Apple CEO Tim Cook confirmed that India will be the country of origin for most iPhones sold in the US in the June quarter as Apple reroutes its supply chain away from China amid tariff uncertainties. Not only in the quarter, but going forward, Apple looks to deliver most of its iPhone demands from India: India could produce nearly $40 billion worth of iPhones by value in FY26, with 80 percent of that output intended for export to the US. Apple has no smartphone production in the US - most of its iPhones are made in China while facilities in India produce around 40 million units per year, about 16 to 17 percent of Apple's annual output.
According to the government data, smartphone exports rose by 55 per cent to $ 24.14 billion in 2024-25 from $15.57 billion in 2023-24 and $10.96 billion in 2022-23. Most phones were exported to the US, the Netherlands, Italy, Japan, and Czech Republic. As per S&P Global Market Intelligence, 81.9 percent of iPhones exported from India between December 2024 and February 2025 were shipped to the U.S. In March 2025, that figure jumped to 97.6 percent following a 219 percent jump in exports – a result of Apple expediting shipments ahead of expected U.S. tariffs.
Amid macro economics headwinds, weak consumer demand and surplus inventory from the previous quarter, the smartphone market in India has been facing challenges. In 1Q25, India's smartphone market shipped 32 million smartphones registering a 5.5 percent decline YoY (year-over-year), making it the second consecutive quarter of decline in shipments. Even though the shipments declined, Apple registered the highest YoY growth of 23 percent amongst the top 5 brands, shipping a first-quarter record of three million units in 1Q25. iPhone 16 was the highest shipped model, accounting for 4 percent of overall India shipments during the quarter, according to International Data Corporation's (IDC) Worldwide Quarterly Mobile Phone Tracker,
IDC estimates a low single-digit growth in 2025 in terms of shipments, as ASPs continue to rise, leading to a mid-single digit value growth annually. Key focus areas for brands include an effective offline strategy to increase the breadth of distribution while sustaining online momentum, multiple micro financing options to drive affordability, offerings in the entry-premium segment (US$200
In January 2022, the government set a goal to achieve electronics production of US$ 300 billion by 2025-26, with a strong focus on improving exports of smartphones. This has helped India become the second-largest mobile phone manufacturer globally, with over 200 manufacturing facilities operating within the country.
