New Delhi, April 23: India's Made in India smartphone manufacturing recorded an 8 per cent year-on-year growth in 2025, powered by a dramatic 28 per cent surge in exports and a steady 1 per cent rise in domestic sell-in, according to Counterpoint Research's Make in India Tracker released on Thursday, April 23. The data underscores India's accelerating transformation from a domestic consumption market to a global smartphone manufacturing hub.

Exports Now Drive One-Third of India's Smartphone Output

Exports now account for approximately one-third of all smartphones manufactured in India, a milestone that signals a structural shift in how global electronics supply chains view the country. This is no longer a story about import substitution — it is about India becoming an indispensable node in global tech manufacturing.

Foxconn Hon Hai emerged as the standout beneficiary, posting a remarkable 48 per cent year-on-year growth in exports, driven primarily by robust Apple iPhone shipments. Tata Electronics, another key assembler of Apple devices, also contributed significantly to this export momentum. Meanwhile, Samsung's in-house Indian manufacturing operations recorded a 4 per cent YoY growth in its export contribution, reflecting the Korean giant's deepening commitment to India as a production base.

Electronics Becomes India's Third Largest Export Category

Tarun Pathak, Research Director at Counterpoint Research, highlighted the macro significance of these numbers. He stated that exports are becoming increasingly central not only for India-based smartphone EMS players but also for the country's broader export strategy. Electronics grew to become the third largest export category in FY25 (financial year ended March 31), driven largely by smartphones, and is on track to become the second largest export category in FY26.

This trajectory places India in direct competition with Vietnam and China as preferred destinations for electronics contract manufacturing. Notably, the US-China tariff war and geopolitical pressures on China-based supply chains have accelerated Apple and other OEMs' shift toward Indian manufacturing — a trend that began gaining momentum post-2020 and has now reached critical mass.

Government Policy Fuelling the Manufacturing Push

The Government of India's policy architecture has been central to this growth. SEZ (Special Economic Zone) reforms notified last year, targeted budgetary allocations in the Union Budget 2025-26, and the latest FDI (Foreign Direct Investment) relaxations have collectively created an enabling environment for both global and domestic manufacturers.

The Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing, launched in 2020, is now nearing the completion of its first phase — and its impact is visible in these export numbers. The Electronics Component Manufacturing Scheme (ECMS) is the next frontier, aimed at deepening domestic value addition by building a robust component ecosystem within India, reducing dependence on imports from China and Taiwan.

Challenges on the Horizon: Memory Prices and Geopolitical Risks

Despite the strong headline numbers, analysts have flagged near-term risks. Pathak cautioned that disruptions due to the US-Iran war could impact logistics, while sustained increases in memory prices may create demand-side pressures over the longer term.

Prachir Singh, Senior Research Analyst at Counterpoint Research, pointed to rising DRAM and NAND memory prices as a key structural challenge. He noted that rising memory prices will be a key challenge, especially as the smartphone market is projected to decline this year, impacting toplines. This is particularly relevant as premium segment growth — which has cushioned domestic EMS players — may face headwinds if device prices spike.

Domestic EMS Players and the Road to 2026

India's domestic EMS (Electronics Manufacturing Services) players continue to scale up even as the PLI scheme's first phase winds down. The twin engines of export growth and premiumization in the domestic market have sustained their expansion.

Singh noted that players beyond the top five are expected to play a more significant role in 2026 as OEMs diversify their manufacturing partnerships. This diversification trend suggests that India's smartphone manufacturing story is broadening beyond Apple-Foxconn-Tata or Samsung to include a wider ecosystem of assemblers and component suppliers.

As India targets becoming the world's second-largest smartphone manufacturer, the coming 12-18 months will be critical in determining whether the country can sustain export momentum, deepen component localisation, and navigate global headwinds — all while keeping domestic demand healthy.