India has emerged as the primary alternative to China in the global smartphone supply chain, with its share of worldwide handset production climbing to roughly 18 per cent by 2025, according to a new industry report. The surge reflects a structural realignment as multinational companies pursue a 'China plus one' manufacturing strategy, reducing concentration risk without fully exiting Chinese facilities.

How the Numbers Stack Up

By 2025, China, India, and Vietnam together accounted for more than 90 per cent of global smartphone production, according to the report. China retained its dominant position at approximately 63 per cent of output, but India's share — negligible less than a decade ago — has climbed to around 18 per cent, making it the second-largest producer globally.

Domestic mobile phone production has expanded more than twentyfold in under ten years, while exports have surged more than 100-fold over the same period — a scale of growth rarely seen in any manufacturing category.

The PLI Effect and Apple's India Pivot

India's rise has been driven in significant part by the Production Linked Incentive (PLI) scheme, which rewards manufacturers for scaling output and meeting localisation targets, the report noted. The policy has attracted marquee names: India now assembles nearly a quarter of all Apple iPhones globally and has become the largest source of smartphones imported into the United States.

Google is also shifting Pixel smartphone production toward India and reportedly plans to end Chinese manufacturing of certain devices by 2027. These moves signal that India is no longer merely a cost-arbitrage destination but an increasingly strategic node in global electronics supply chains.

The Limits of the Shift

The emerging global strategy, the report emphasised, is 'not to replace China but to reduce dependence on it by developing additional manufacturing centres.' China remains central to the broader electronics ecosystem as the world's largest smartphone producer and a dominant supplier of integrated circuits and display panels.

India's own value addition in mobile phones has risen to around 23 per cent, but most components — including critical sub-assemblies — continue to be imported. Scaling domestic value addition is the next frontier, with ambitions spanning circuit boards, camera modules, batteries, displays, and semiconductors.

The Semiconductor Bet

To move up the value chain, the Indian government has committed approximately $10 billion through its Semicon India programme for semiconductor development, with additional funding targeting chip design, manufacturing equipment, specialty materials, and skilled engineers.

The country's stated ambition is to build a $120 billion to $150 billion semiconductor value chain by 2035, according to the report. If achieved, this would transform India from an assembly hub into a full-spectrum electronics manufacturing power — though analysts caution that semiconductor ecosystems take decades to mature.

What Comes Next

India's trajectory in global smartphone manufacturing is now well established, but sustaining momentum will require closing the component gap. With global tech majors deepening their India commitments and government incentives still in force, the next phase of growth will test whether the country can move beyond final assembly into the higher-value layers of the electronics supply chain.