For years, China dominated global electronics manufacturing, producing more than two-thirds of the world’s smartphones at its peak. But the pandemic, trade tensions, tariffs and export controls have exposed the risks of relying too heavily on a single manufacturing hub.
Companies are now pursuing a “China plus one” strategy, retaining production in China while developing alternative manufacturing bases. India has emerged as one of the biggest beneficiaries of this shift, alongside countries such as Vietnam. By 2025, China, India and Vietnam accounted for more than 90 percent of global smartphone production. China remained dominant with about 63 percent, but India had increased its share to roughly 18 percent and was continuing to expand.
Apple illustrates the rapid change. India now assembles nearly a quarter of iPhones and has become the largest source of smartphones imported into the United States. Google is also shifting Pixel production toward India and plans to end Chinese manufacturing of its phones, watches and earbuds by 2027.
China, however, remains central to the electronics industry. It is still the world’s largest smartphone producer and a major source of integrated circuits and display panels. The emerging strategy is therefore not to replace China but to reduce dependence on it by developing additional manufacturing centers.
India’s rise has been driven in part by government support, particularly the Production Linked Incentive scheme, which rewards manufacturers for increasing production and meeting localization targets. Domestic mobile phone production has expanded more than twentyfold in less than a decade, while exports have increased more than 100-fold.
India is also seeking to move beyond assembling imported components. Its goal is to develop capabilities in circuit boards, camera modules, batteries, displays and semiconductors. Domestic value addition in mobile phones has risen to about 23 percent, although most components and much of the value still come from abroad.
Semiconductors are a major part of India’s ambitions. The government has committed about $10 billion through its Semicon India program, with further funding targeting chip design, manufacturing equipment, specialty materials and skilled engineers. India aims to build a $120 billion to $150 billion semiconductor value chain by 2035.The shift still faces major obstacles.
India continues to struggle with infrastructure, logistics, environmental approvals and shortages of specialised manufacturing skills. Vietnam, Malaysia, Thailand and Mexico have also benefited strongly from companies seeking alternatives to China, while India’s relatively limited network of free-trade agreements can restrict its export advantages.
The broader trend is therefore not the emergence of an immediate “new China”, but a more diversified global electronics supply chain. India is becoming a major manufacturing centre and a potential partner in semiconductor and technology supply chains, while China remains indispensable. The future is likely to be shaped by a network of competing and complementary production hubs rather than a single dominant centre.
