China out, India in: How India grabbed 40% of US smartphone supply

India has emerged as a major force in the global electronics supply chain, capturing nearly 40 per cent of the smartphone supply to the United States that was previously dominated by China, according to a report by McKinsey & Company.

The shift reflects a broader realignment in global trade, with the United States actively diversifying its imports away from China. The report highlights that over $80 billion worth of trade previously sourced from China has been redistributed, with India and ASEAN countries emerging as key beneficiaries.

India’s rapid rise in smartphone exports has been driven largely by manufacturing expansion, particularly led by Apple. The company significantly scaled up its iPhone production in India, assembling around 55 million units in 2025, a sharp increase from the previous year. For the first time, all major iPhone 17 variants are being produced in India through facilities operated by Foxconn and Tata Electronics.

This surge has translated into a dramatic increase in India’s share of US smartphone imports. Estimates suggest India accounted for over 40 per cent of shipments to the US in 2025, while China’s share dropped significantly during the same period.

The development comes despite logistical challenges, including the long distance between India and the US. Experts say the growth highlights the strengthening of India’s manufacturing ecosystem and its growing integration into global supply chains.

The report also notes that this transformation is not a decline in global trade but a reconfiguration. While US imports from China have decreased, overall trade volumes have risen, driven by demand for high-tech goods such as semiconductors and data infrastructure.

At the same time, China is adapting by shifting towards component manufacturing, supplying parts to countries like India rather than exporting finished smartphones.

India’s smartphone exports to the US have seen exceptional growth, crossing $16 billion in 2025, making mobile devices the country’s largest export category to the American market. Government initiatives such as production-linked incentives and tax benefits have further accelerated this momentum.

The shift underscores India’s growing importance in global manufacturing and signals a long-term change in the dynamics of international trade, as geopolitical and economic factors reshape supply chains worldwide.