Trump Tariffs: India May Gain as China’s Smartphone Output Could Fall by 55%

A report by Counterpoint Research has found that the ongoing trade war between the world’s largest economies—the US and China—is expected to benefit India.

According to Counterpoint Research, China’s domination in smartphone manufacturing could drastically decline to 55% -- if the tariff tension continues.

In such a scenario, India’s global share of smartphone production is expected to rise to 25-28% by 2026 from 18% in 2024. Apple Inc and Samsung are expected to be the major drivers of exports from India to the US.

For context, US President Donald Trump imposed a minimum of 10% tariffs on over 100 countries in early April. This triggered a battle between the US and China, one of the most severely affected countries. While Trump paused the tariff for a period of 90 days, the offer was not extended to China. Consequently, the trade war escalated with the US slapping a 245% tariff on all Chinese imports and Beijing retaliating with a 125% tariff on all US goods.

The trade war has spooked big American conglomerates that are heavily dependent on China for components and manufacturing. Against this backdrop, India stands to benefit from the tariff war as it could become the next best destination for these American companies to move manufacturing. iPhone maker Apple has already ramped up production in India.

It may be worth noting that 20% of Apple’s global exports come from India. This is expected to rise further to 25-28% by 2026. It could also reach 35% by 2026-27.

The laptop and personal computer (PC) segment, where India is not a major player yet, could also see an upswing.

Global brands currently import products worth $21 billion from China into the US.

According to Counterpoint, China’s share in global laptop manufacturing could drop to 68-70% from 75% in 2024.

India is a major importer of laptops and PCs with less than 1% share in the global laptop value chain, which is worth around $200 billion per year.

Most big names, including HP, Dell and others, have their manufacturing units spread across China and Vietnam. Hence, moving production to India may not be as easy.

However, the Production-Linked Incentive Scheme could change the wind in India’s direction as its share in production by volume could rise to 7% in 2026 from 4% in 2024. Counterpoint noted that the change could be more dramatic if major global players decide to shift a larger portion of their capacity to India from China for exports as well as to cater to the needs of the domestic market.