India's smartphone exports to US fly high, retreat in top European markets

An interplay of smartphone makers' decisions and government trade policies could be the reason for trend

India’s production-linked incentive scheme for smartphones has given it rich dividends in international trade. Smartphones are the largest exported commodity this year, and shipments have more than doubled from nearly $11 billion in FY23 to $24.14 billion in FY25.

 

However, the destination market for such exports has narrowed over time, with the United States (US) becoming the dominant buyer of India-made smartphones. It means that India’s smartphone export success is contingent upon the US, with which it is embroiled in a trade dispute.

 

Smartphones are exempt from the 50 per cent tariff the US levies on Indian goods entering its market but that could change. US President Donald Trump in May asked Apple Inc. and other smartphone makers to shift their manufacturing back to the US or face a 25 per cent tariff.

 

India’s smartphone exports to the world from April to July of FY26 (latest data available for that year) hit $10.7 billion, marking a surge of over 56 per cent year-on-year. Of that amount, shipments to the US were worth $7.46 billion, which was nearly three times that of FY25 (April-July) figures.

 

India’s smartphone exports to non-US markets reduced 31.56 per cent from $3.96 billion in FY25 (April-July) to $2.71 billion in FY26 (April-July). The United Arab Emirates (UAE) is an exception: India’s smartphone exports to that market doubled. 

 

China has filled the space vacated by India-made smartphones in major European markets. The United Kingdom (UK), the Netherlands, Italy, Austria and the Czech Republic are major export markets for Indian smartphones, after the US and the UAE.

 

India’s share in the smartphone imports by the UK, the Netherlands, the Czech Republic and Italy has dropped sharply. In the first three countries, the share of Chinese smartphones has increased commensurately. The share of the Netherlands and Ireland has increased in smartphone imports by Italy, where even the Chinese share has dipped. 

 

The US got 77.28 per cent of its smartphone imports from China in calendar year 2022; India’s share was 1.77 per cent. In the first seven months of CY25, India’s share was 45 per cent and it overtook China’s (41.07 per cent). Vietnam’s share in US smartphone imports increased from 4.23 per cent last year in CY24 to more than 12 per cent in CY25 (Jan-July). 

 

However, trends in smartphone exports should not be attributed to a single factor. An interplay of smartphone companies’ decisions and government trade policies world over seems to be in motion for such a pattern in exports of India’s crown jewel at the moment.