Alphabet may shift Pixel production to India amid US tariffs on Vietnam

Alphabet is considering moving part of its Pixel phone manufacturing from Vietnam to India to serve US markets, as tariffs make Vietnam less competitive

Alphabet Inc, the parent company of Google, has begun discussions with its contract manufacturing partners in India—Dixon Technologies and Foxconn—to move a portion of global Pixel smartphone production from Vietnam to India. The move is aimed at fulfilling US-bound shipments, according to a report by The Economic Times.

 

The first round of talks between Alphabet and the two manufacturers took place approximately two weeks ago. The discussions reflect Alphabet’s broader strategy to diversify its manufacturing base and reduce dependency on Vietnam amid potential tariff hikes by the United States.   

 

 

US tariffs prompt manufacturing recalibration

 

The strategic shift is being driven by the threat of steep tariffs on Vietnamese goods. Vietnam currently serves as the main hub for Pixel production. However, the US administration, under President Donald Trump, announced tariffs as high as 46 per cent on Vietnamese imports, compared with 26 per cent for goods from India.

 

Although a 90-day pause on reciprocal tariffs was declared on April 9, a 10 per cent baseline tariff remains in place. Notably, China, another major electronics manufacturing base, was excluded from the deferment and continues to face a 145 per cent tariff.

 

Component localisation in focus

 

Alphabet has also shared plans to localise key components in India, including fingerprint sensors, batteries, chargers, and enclosures. As of now, most components used in Pixel phones assembled in India are imported. The intent is to reduce costs and increase competitiveness by tapping into local sourcing, the news report said. 

 

India is accelerating negotiations with the United States to finalise the initial phase of a trade agreement by September or October. The two countries aim to boost bilateral trade from $190 billion to $500 billion by 2030. A favourable trade framework would further incentivise American tech firms like Alphabet and Apple to scale up manufacturing in India for exports to the US.

 

Pixel production in India

 

Currently, Dixon and Foxconn produce about 43,000 to 45,000 Pixel smartphones monthly in India, exclusively for domestic sale. This effort is part of Alphabet’s strategy to mitigate import duties—India imposes around 16.5 per cent in total import levies on smartphones—and better compete with rivals like Apple and Samsung in the premium category.   

 

  Foxconn began Pixel assembly at its Tamil Nadu facility in August last year, focusing mainly on older models. Dixon, in partnership with Taiwan’s Compal Electronics, started production in December at its Noida unit and now manufactures 65–70 per cent of the Pixel units made in India, including the latest generation, the report said.

 

Although Alphabet initially planned to position India as a global Pixel manufacturing hub over two to three years, current geopolitical and trade developments have accelerated the timeline. Besides India and Vietnam, some Pixel units are also made in China.

 

Google had shifted Pixel production to Vietnam in 2023—primarily through Foxconn and Compal—as part of efforts to reduce reliance on Chinese manufacturing. Reports suggest nearly half of all premium Pixel models were assembled in Vietnam last year.

 

Global supply expansion

 

An executive involved in the process said Alphabet plans to gradually increase Pixel exports from India to the US. The company is also exploring the potential of supplying additional international markets, the report said.