Trump blinked on smartphones tariffs. Can India still seize the moment?

The exemption came as a relief to tech majors, many of which were bracing for steep cost hikes. Without it, tariffs on electronic goods imported from China would have reached as high as 145%, potentially driving up US retail prices significantly. For instance, estimates suggest that the price of the iPhone 16 Pro Max with 1TB storage could have surged by 24–44%, putting its US price tag nearly on par with those in markets like the UK, Germany, France, and India.

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Still, India stands to benefit. Even with the exemption, the broader US–China trade tensions have made global companies increasingly wary of over-reliance on China. 

India, which has already built a growing ecosystem for the assembly and manufacture of electronic goods—particularly smartphones—is well-positioned to capture a larger share of this shifting supply chain. A case in point: Apple recently airlifted 600 tonnes of iPhones from India to the US in a bid to sidestep potential tariff risks.

The White House’s policy reversal also underscores America’s overwhelming dependence on Chinese imports. A Mint analysis of US smartphone import data from the International Trade Centre shows that China accounts for nearly 76% of the total, followed by Vietnam and India.

Incentive push

Many global companies have already embraced a ‘China Plus One’ strategy to diversify their manufacturing and supply chains. 

In 2022, Apple began shifting operations to India after strict Covid lockdowns disrupted production in China. Over the past year, Apple assembled $22 billion worth of iPhones in India—up 60% from the previous year—raising India’s share in global iPhone production to 20%, according to a Bloomberg report.

Apple’s pivot coincided with the Indian government’s push to scale up local manufacturing through the Production-Linked Incentive (PLI) scheme. Following early success in electronics, the scheme received a higher budgetary allocation: ₹9,000 crore in FY26, up from ₹5,777 crore actual outlay in the previous year.

This policy momentum has driven a rapid rise in India’s smartphone exports.

Between April 2024 and January 2025, India exported smartphones worth ₹1.5 trillion, up from ₹1.2 trillion in FY24. The recent jitters over Trump’s tariff threats only reinforced India’s growing role in global supply chains.

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According to the India Cellular and Electronics Association (ICEA), India’s total smartphone exports touched ₹2 trillion in FY25—with iPhones accounting for 75% of the total.

Raising the bar

India has also seen a sharp uptick in overall electronics exports, particularly to the US. 

An analysis of India’s trade data shows that the share of electronics in total exports has climbed significantly over the past five years. Specifically, electronics exports to the US now make up 12–13% of the total—up from just 4% three years ago.

While the US intended to apply reciprocal tariffs across the board, the rollback and exemptions have introduced new volatility. Still, India is less exposed than China, offering it a window to deepen its manufacturing footprint and attract more global investment.

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“The good thing is that now the government has extended the PLI scheme to parts and component manufacturing also. While we are exporting smartphones, most of the parts and components are still being imported from China,” said Ajay Sahai, director of Federation of Indian Export Organisations (FIEO). “We can now expect that the entire value chain will probably get established in the country.”