Monday 31 / August / 2026
New Delhi: India is rapidly strengthening its position in global electronics manufacturing as companies diversify supply chains away from an overreliance on China amid rising trade tensions, tariffs, export controls and lessons from the COVID-19 pandemic.
For years, China dominated global electronics production, at one point accounting for more than two-thirds of the world’s smartphones. The changing geopolitical and business environment has prompted multinational companies to adopt a “China plus one” strategy, maintaining operations in China while establishing additional manufacturing bases elsewhere.
India and Vietnam have emerged among the biggest beneficiaries of this diversification. By 2025, China, India and Vietnam together accounted for more than 90 per cent of global smartphone production. China retained the largest share at around 63 per cent, while India’s share had risen to roughly 18 per cent and continued to grow.
Apple has become one of the clearest examples of the shift. India now assembles nearly a quarter of iPhones and has emerged as the largest source of smartphones imported into the United States. Google is similarly expanding Pixel production in India and plans to end manufacturing of its phones, watches and earbuds in China by 2027.
Despite the shift, China remains central to the global electronics industry. It continues to be the world's largest smartphone manufacturing base and a major producer of integrated circuits, display panels and other critical components. The emerging model is therefore less about replacing China and more about reducing dependence on a single manufacturing centre.
India pushes beyond assembly
Government incentives have played a significant role in India's expansion. The Production Linked Incentive (PLI) scheme rewards manufacturers for increasing production and meeting specified localisation targets.
As a result, India's mobile phone production has expanded more than twentyfold in less than a decade, while exports have increased more than 100-fold.
New Delhi is now seeking to move up the value chain by developing domestic capabilities in printed circuit boards, camera modules, batteries, displays and semiconductors. Domestic value addition in mobile phones has increased to about 23 per cent, although a substantial portion of components and overall value still originates overseas.
Semiconductors represent another major pillar of India's strategy. The government has committed about $10 billion under the Semicon India programme, with additional support aimed at chip design, manufacturing equipment, specialty materials and the development of skilled engineering talent.
India has set an ambitious target of creating a $120 billion-$150 billion semiconductor value chain by 2035, reflecting its broader effort to establish itself as a strategic technology manufacturing hub.
Challenges remain
India's rise is not without obstacles. Infrastructure and logistics challenges, lengthy environmental approvals and shortages of specialised manufacturing skills remain constraints. Other economies, including Vietnam, Malaysia, Thailand and Mexico, are also attracting companies seeking alternatives to China.
India's comparatively limited network of free-trade agreements can also affect its competitiveness in certain export markets.
The global electronics industry is therefore unlikely to see India simply become a “new China” in the near term. Instead, the emerging model is one of diversified and interconnected manufacturing hubs.
India is increasingly becoming an important centre for electronics production and a potential partner in semiconductor and technology supply chains, while China's scale, infrastructure and component ecosystem ensure that it remains indispensable to the industry.
The future of electronics manufacturing is likely to be defined not by one dominant production centre, but by a network of competing and complementary hubs across Asia and beyond.
