Behind the sluggish market expansion lies a deeper structural transformation: for the first time, India emerged as the leading manufacturing hub for smartphones shipped to the U.S., largely at the expense of China. The shift reflects growing pressure on vendors to restructure global supply chains in response to U.S. tariffs on Chinese electronics and a cooling economic climate.
Why It Matters
The ongoing trade friction between the U.S. and China has forced major smartphone brands — most notably Apple — to diversify their production lines. With China targeted by substantial tariffs, manufacturers have increasingly turned to India to mitigate cost pressures and safeguard their profit margins.
"India became the leading manufacturing hub for smartphones sold in the US for the very first time in Q2 2025," said Sanyam Chaurasia, Principal Analyst at Canalys. "This was largely driven by Apple's accelerated supply chain shift to India amid an uncertain trade landscape between the US and China."
The Political Backdrop
Apple's strategic move to shift a large portion of its iPhone assembly to India earlier this year drew the ire of U.S. President Donald Trump, who criticized the company for not investing in domestic manufacturing. Trump even floated the possibility of imposing further tariffs on Apple products if production remained offshore — a signal that trade tensions are not just economic but also politically charged.
By the Numbers
- China’s share of U.S. smartphone shipments plummeted from 61% in Q2 2024 to just 25% in Q2 2025.
- India’s output surged, with shipments of India-made smartphones to the U.S. increasing by 240% year-on-year.
- Despite the supply shift, Apple’s U.S. iPhone shipments fell 11%, highlighting tepid consumer demand.
- Samsung, on the other hand, saw a 38% increase in U.S. shipments over the same period, likely benefiting from a well-positioned supply chain and broader product offerings.
What’s Next?
While vendors ramped up inventory ahead of potential tariff hikes, the market saw only marginal growth — a sign of muted consumer appetite in an increasingly constrained economic environment. According to Runar Bjorhovde, Senior Analyst at Canalys, this front-loading of devices widened the gap between sell-in (devices shipped to retailers) and sell-through (devices actually sold to consumers), a growing concern for the industry.
The developments mark a pivotal moment in the global tech supply chain. As trade tensions persist and cost optimization remains a priority, India’s role as a key player in global electronics manufacturing is likely to grow — even as political pressure builds for more U.S.-based production.