India has rapidly grown from a minor player to producing approximately 18 percent of the world's smartphones, driven by government incentives and geopolitical concerns about over-reliance on Chinese manufacturing.
The geography of global electronics manufacturing is undergoing a significant shift, with India emerging as a major production center alongside established players. By 2025, China, India, and Vietnam together account for over 90 percent of global smartphone production, with China maintaining roughly 63 percent of output while India has climbed to approximately 18 percent and continues rising. Apple's experience illustrates this transformation — the company now assembles close to a quarter of its iPhones in India, and Indian-made smartphones have become the largest source of smartphone imports to the United States, capturing 44 percent of that market compared to just 13 percent a year earlier.
This shift stems from multiple factors reshaping corporate strategy. Manufacturing wages in China have roughly tripled since 2010, while proposed tariffs on Chinese electronics approach 35 percent in some cases. Companies have adopted a "China plus one" approach, maintaining production scale in China while building alternative manufacturing lines elsewhere to mitigate geopolitical and supply-chain risks. India's government has actively pursued this outcome through the Production Linked Incentive scheme, which subsidizes manufacturers based on incremental sales while requiring local production capacity and localization targets. Mobile phone exports from India have multiplied more than a hundredfold in the past decade, with smartphones becoming the country's largest export category.
India's ambitions extend beyond simple assembly work toward higher-value components. Domestic value addition in Indian-made phones has risen to roughly 23 percent, though most phone value still comes from imported components. New Delhi has committed approximately $10 billion through its Semicon India program and an additional $13 billion through Semicon 2.0 to develop semiconductor capabilities, aiming to build a $120-150 billion domestic semiconductor value chain by 2035.
However, significant obstacles remain. India's manufacturing sector still depends heavily on government subsidies, faces infrastructure challenges including power reliability and logistics constraints, and lacks the deep supplier ecosystem that true self-sufficiency requires. Several analyses suggest Vietnam, Thailand, Malaysia, and Mexico have absorbed the "China plus one" shift more broadly in some sectors. India's relatively limited free trade agreements, particularly with the European Union, also constrain export advantages. Experts caution against treating India as simply "the next China," noting that its federal structure and democratic governance create a different path than China's centralized model.
