India pips China as top smartphone supplier to US in Q2, 2025: Canalys

India Surpasses China to Become Top Smartphone Exporter to the US in Q2 2025

In a landmark development that underscores the shifting dynamics of global supply chains, India has overtaken China to become the largest smartphone exporter to the United States in Q2 2025, according to data released by market research firm Canalys. This is the first time India has claimed the top spot, marking a significant milestone in its growing stature as a global electronics manufacturing hub.

Canalys’ report shows that India accounted for 35% of US smartphone imports between April and June 2025, up from just 26% in the previous quarter. Meanwhile, China’s share dropped to 30%, reflecting a mix of geopolitical tensions, diversification strategies by global OEMs, and increased domestic production capabilities in India.

Strategic Shifts: Why India Is Gaining Ground

India's rise is largely attributed to the strategic reorientation by major smartphone manufacturers such as Apple, Samsung, and Xiaomi, who have increasingly diversified production outside China to mitigate supply chain risks and geopolitical exposure. The Production Linked Incentive (PLI) scheme introduced by the Indian government has also played a pivotal role in boosting domestic manufacturing and exports.

“India’s policy ecosystem and infrastructure improvements are finally bearing fruit,” said Rushabh Doshi, Research Director at Canalys. “Global brands have fast-tracked their investment into Indian manufacturing over the past few quarters. As a result, India is no longer just a consumer market, but a credible export base.”

Notably, Apple shipped nearly 12 million iPhones from India to global markets in Q2, with a significant portion destined for the US. The company’s contract manufacturers — Foxconn, Pegatron, and Wistron — have ramped up local assembly lines to meet export demand.

China’s Declining Share: More Than Just Supply Chain Risks

While India celebrates its milestone, China's reduced share signals deeper challenges. Trade restrictions, sanctions on Chinese tech companies, and ongoing US-China tensions have weighed heavily on the country's exports.

“Tech decoupling between the US and China is accelerating, and India is one of the biggest beneficiaries,” said Neel Mehta, co-founder of Blue Lotus Strategies, a supply chain consultancy. “This shift is not a temporary blip, but a structural transformation that may redefine global tech manufacturing over the next decade.”

The data also reveals that Vietnam and Mexico continue to gain traction as alternate sourcing hubs, though their scale remains limited compared to India’s rise.

Policy Support, Skilled Labor, and Logistics Push India Ahead

India’s ascent comes on the back of consistent policy incentives, including the PLI scheme worth ₹1.97 lakh crore ($24 billion), favorable tariff structures, and improvements in export infrastructure. Additionally, logistics parks, multimodal hubs, and the DigiYatra platform have helped streamline trade processes.

Furthermore, India’s young and skilled labor force, combined with the increasing availability of semiconductor testing and packaging facilities, has improved the country's overall competitiveness in the tech supply chain.

"The electronics ecosystem in India is maturing rapidly," said Navkendar Singh, Associate VP at IDC India. “From low-value assembly to higher-value components, India is climbing the value chain in smartphone manufacturing.”

Implications for the Global Market

The transition holds several implications for the global smartphone market. For one, US companies can now source key electronic components and devices without relying entirely on China, reducing single-source dependency and potential tariffs. Additionally, this move is expected to strengthen bilateral trade between India and the US in the technology sector.

Moreover, OEMs are likely to invest further in India, scaling up assembly lines, setting up R&D centers, and training local talent. Samsung, for instance, is reportedly considering expanding its Noida facility to serve both domestic and export markets.

Market Reactions and Outlook

The news was well-received in Indian equity markets, with shares of contract manufacturers like Dixon Technologies and Bharat FIH gaining 4–7% intraday. Analysts believe this trend will continue as more global players announce production shifts to India.

Investors are viewing India’s emergence as a tech manufacturing hub as a long-term secular theme, according to Kunal Bhatia, Head of Research at Dalal & Broacha. “Companies embedded in this ecosystem — from EMS players to logistics firms — are poised for structural growth over the next 5–10 years.”

Canalys forecasts that India could account for over 40% of US smartphone imports by Q4 2025, if the current momentum continues and infrastructure bottlenecks are addressed.

Challenges Remain

While the milestone is significant, challenges remain. India must scale up component manufacturing, address supply chain inefficiencies, and ensure consistent power and logistics for uninterrupted production. Moreover, semiconductor dependency continues to be a major concern, though initiatives like the India Semiconductor Mission aim to address it.

India’s emergence as the top smartphone supplier to the US in Q2 2025 is more than a statistical milestone — it’s a testament to its growing capabilities and global trust in its manufacturing ecosystem. As geopolitical dynamics evolve and the world continues to diversify supply chains, India stands well-positioned to play a pivotal role in shaping the future of global electronics.