India's Smartphone Exports to US Surge 240% Amid Trade Tensions

The ongoing trade tensions between the United States and other nations are significantly reshaping the global supply chain, particularly in the smartphone market. According to a report by a research company, the total number of smartphones assembled in India during the second quarter of this year increased by 240% compared to the same period last year. This surge has led India to account for 44% of the total smartphone imports into the United States, a stark contrast to the 13% share it held in the previous year.

American suppliers, anticipating the impact of tariffs, have been stockpiling inventory and maintaining high stock levels. However, the overall smartphone shipment volume in the United States for the second quarter grew by only 1%, indicating a sluggish market demand amidst increasing economic pressures. The report suggests that even though smartphones have not yet been subject to tariffs, the altered spending patterns of American consumers due to tariffs on other goods will likely result in a modest demand for smartphones in the latter half of the year.

India has emerged as the largest supplier of smartphones to the United States, followed by Vietnam with a 30% share, and China with a 25% share. The shift is largely driven by the uncertainty in global trade, prompting companies like Apple to accelerate the relocation of their supply chains to India. Apple has already begun producing and assembling the iPhone 16 Pro in India, although it still relies on China's existing manufacturing infrastructure.

Other major brands, such as Samsung and Motorola, have also increased their manufacturing presence in India to supply the U.S. market. However, their transition has been slower compared to Apple. Motorola continues to maintain its primary manufacturing base in China, while Samsung relies heavily on Vietnam for its shipments.

The report also warns that the operational challenges, uncertain regulatory policies, and declining consumer demand make it less attractive for smaller smartphone manufacturers to operate in the United States. The market is already dominated by the top three brands, which hold over 90% of the market share.

In the second quarter, Apple's smartphone shipments in the U.S. decreased by 11% year-over-year to 13.3 million units, a significant drop from the 25% growth seen in the first quarter. Samsung, on the other hand, saw a 38% increase in shipments to 8.3 million units. Motorola continued its expansion, with shipments growing by 2% to 3.2 million units.