In a historic pivot that stresses the tectonic shifts in global electronics manufacturing, India has overtaken China as the top source of smartphones sold in the United States. According to Canalys, in the second quarter of 2025, India accounted for a staggering 44 per cent of US-bound smartphone shipments, surpassing China, whose share fell to just 25 per cent, down from over 60 per cent a year earlier. Vietnam, where Samsung Electronics Co. has concentrated much of its manufacturing muscle, ranked second.
Image for representational purposes only
The shift, while driven by the mobility strategies of Apple Inc. and its supply chain, carries far-reaching consequences for materials markets — aluminium foremost among them.
The acceleration of Indian electronics exports is the downstream result of strategic risk diversification. As US-China trade tensions fester and tariffs loom large, Apple and its peers are rewiring their supply chains at speed. While China remains the assembly line of the world in absolute terms, its relative dominance is eroding in key high-value segments. Apple’s iPhones, still predominantly made in China, are now increasingly assembled in India, a change that is being reflected in shipping patterns and origin data.
According to Canalys, India’s shipments to the US more than tripled in the past year, signalling not a seasonal spike but the early stages of a systemic relocation. Much of the credit, and arguably the catalyst, goes to Apple.
Although its US iPhone shipments declined by 11 per cent in Q2, largely due to aggressive stockpiling in Q1, the company has been frontloading inventories amid mounting tariff risks and geopolitical volatility. That frontloading, Canalys suggests, helped inflate India’s Q2 numbers. But the infrastructure to sustain this output is already in place.
The tectonic nature of this shift is perhaps best captured by China’s fall from 60 per cent of U.S.-bound smartphone shipments to 25 per cent in just one year. That level of erosion signals more than cyclical variance. It hints that the China-plus-one strategy is no longer just theoretical. India is no longer merely an alternative; it is becoming the default.
This has significant implications for aluminium demand, supply chains, and bilateral trade policy. Smartphones, while compact, are among the most aluminium-intensive consumer electronics on the market. The casings, frames, and sometimes even internal structural components rely on high-quality aluminium alloys — often precision-engineered to tolerances required by device miniaturisation. As Apple ramps up production in India, the local sourcing and import requirements for electronics-grade aluminium are poised to grow in tandem.
More specifically, Apple’s Indian contract manufacturers (Foxconn, Pegatron, and Wistron) are rapidly localising components to align with the Indian government’s Production-Linked Incentive (PLI) schemes, which reward domestic value addition. While some critical materials like chips still arrive from abroad, aluminium components (casings, frames, and heatsinks) are increasingly being machined and anodised within India. This localisation wave offers opportunities for India’s aluminium extrusion, casting, and finishing industries to align with global tech supply chains in ways previously limited to Taiwanese or Chinese vendors.
But there’s a geopolitical layer as well. The US has repeatedly pushed its major tech firms to onshore production or, at the very least, reduce dependence on Chinese manufacturing. Apple, though still without smartphone production on American soil, has committed to spending USD 500 billion domestically over the next four years in facilities, jobs, and partnerships. That commitment, however, is likely to materialise in chip design, AI infrastructure, and data centres—not smartphone assembly. India’s emergence as a production hub thus serves both commercial and political risk hedging: it keeps Apple’s cost structure intact while offering a degree of insulation from US–China decoupling.
Vietnam’s role in this tri-polar reconfiguration cannot be ignored either. Although it trails India in Q2 shipments to the US, its steady rise as Samsung’s preferred base for smartphone production has cemented its reputation as a flexible, business-friendly alternative to China. Yet Vietnam’s aluminium supply chain is more import-dependent, particularly for refined aluminium and processed components, limiting its local value-add compared to what India is attempting to build.
In this context, the aluminium value chain faces a dual challenge: anticipating geographic shifts in demand and aligning alloy and finishing standards with the precise specifications of Tier 1 electronics brands. India’s domestic aluminium ecosystem, led by companies like Hindalco and Jindal Aluminium, is reasonably well-positioned, but there is a yawning gap in high-purity alloys, clean-room-grade finishing, and automation in component processing.
Further, if India’s role as a smartphone production hub continues to grow, its aluminium exports to satellite production centres in Southeast Asia and even back to the US could increase in tandem. That adds urgency to policy discussions around zero-for-zero tariff regimes, aluminium traceability under global climate standards, and supply resilience.
Notably, the shift in smartphone origin data also feeds into a broader trade narrative. The US imported USD 370.2 billion worth of goods from the European Union in 2024 and USD 605.8 billion in the reverse direction. But increasingly, India is positioning itself as a key trans-Pacific supplier to the US — not just in textiles and IT services, but in high-value consumer electronics.
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