Over the past few years, India has been trying to position itself as a leading destination for smartphone manufacturing, with the government offering incentives like the Production Linked Incentive (PLI) Scheme. However, a new report by Nikkei Asia (cited by 9to5Mac) states that the ongoing Iran conflict could derail India's booming smartphone exports.
Indian exports could be impacted by Iran conflict:
With the growing trade rivalry between the US and China due to Donald Trump's reciprocal tariffs and their aftermath, India has emerged as one of the top alternatives to diversify its manufacturing footprint. Reportedly, this, along with the Indian government's own initiatives pushing manufacturing, has led to a surge in exports in the country as global brands increased local assembly and overseas shipments.
The report, while citing official data, notes that India exported about $11 billion worth of mobile phones in the first half of the fiscal year beginning April 2025, marking a 55% increase from the previous year.
However, the new report, while citing analysts, notes that shipments that rely heavily on Middle East trade hubs are facing significant declines in the coming weeks. It adds that if the conflict escalates, the exports of smartphones from India could go down by 22 to 25% in the coming weeks.
The impact of the conflict is said to be more on logistics, while the ‘demand remains relatively resilient’. Reportedly, companies are temporarily shifting away from hubs like Dubai and Doha and using more direct routes.
It also adds that Apple is among the large brands which are less exposed to the disruptions from rerouting shipments.
1 in 4 iPhones sold globally made in India:
An earlier report by Bloomberg had noted that Apple now makes around 25% of the iPhones sold in the world in India, marking a 53% increase in its production from the preceding year.
Reports indicate that Apple assembled around 55 million iPhones in India in 2025, up from the 36 million iPhones assembled a year earlier, whereas Apple produced around 220 million to 230 million iPhones in the last year.
However, China still makes the biggest chunk of iPhones sold globally, but the trade war between the US and China led Apple and its suppliers to move a great share of devices meant for the American market to alternative manufacturing hubs, where India emerged as the major spot.
The report also notes that electronics assembly still costs more in India compared to manufacturing hubs like China and Vietnam.
