By Zarak Khan | 2026-04-28

India has emerged as the primary challenger to China's entrenched dominance in the American technology market, taking away from China almost half of the US market for imported phones. The statistic reflects the difference between 2025 and 2024.

The United States has already replaced "about two-thirds of the goods it previously sourced from China -- valued at more than $80 billion," by diversifying toward countries including India, the McKinsey Global Institute (MGI) said in its March report titled "Geopolitics and the Geometry of Global Trade: 2026 Update."

The report highlights India's expanding role, noting that its smartphone exports to the United States now account for levels "equal to roughly 40 percent of what China had supplied."

Policy push

New Delhi's industrial policy has been central to this shift. Initiatives such as "Make in India" have sought to boost "domestic manufacturing capabilities and export growth," McKinsey said.

By 2025, India had significantly increased its share of global smartphone production.

According to the McKinsey report, devices produced in India, benefiting from exemptions from US tariffs, became a major engine of export growth.

It added that US smartphone imports from India increased by about $15 billion, while imports from China fell by roughly $18 billion in 2025 compared to 2024.

Apple, the US technology company, assembled approximately 55 million iPhones in India in 2025, representing about 25% of its global production, up from 36 million units a year earlier, according to a March report by Bloomberg.

The company produces roughly 220 million to 230 million iPhones annually, with India's share rising rapidly over the past few years overall, the report said.

Security squeeze

The expansion of India's role in the US technology supply chain comes as concern mounts over Chinese-origin devices and digital infrastructure.

Officials in Washington have increasingly warned about potential vulnerabilities linked to Chinese technology. They include data security and operational control during geopolitical crises.

The United States correspondingly has supported the deployment of low-cost smartphones powered by American software across the Indo-Pacific, seeking to counter China's growing influence in regional digital infrastructure.

In February, the US Department of State announced the "Edge AI Package," a funding initiative of up to $200 million to accelerate the rollout of secure, high-quality, and affordable smartphones in the region. Eligible devices must operate on "trusted" American mobile operating systems, including Android or iOS, the department said.

The Edge AI Package could hit Chinese smartphone manufacturers, including Huawei, Xiaomi, Oppo and Vivo, hard in emerging Indo-Pacific markets, Lizzi C. Lee, a fellow at the Asia Society Policy Institute, said recently.

China's decline in the global smartphone supply chain also stemmed from a series of targeted bans on Chinese hardware and software, driven by concerns over data privacy and state-backed surveillance.

Last June, the United States and Taiwan blacklisted major Chinese tech companies, including Huawei, amid security concerns tied to critical infrastructure.

In a further escalation, the US Federal Communications Commission is considering barring three major Chinese telecom companies from operating data centers within the United States, Reuters reported April 9.

The proposal includes restricting US telecom carriers from connecting with those Chinese operators, the report added.

Britain and Australia have imposed similar restrictions on Chinese investment in sensitive infrastructure.

India curbs

Parallel to these developments, India has accelerated the reduction of reliance on Chinese-origin technologies across strategic sectors. Starting April 1, New Delhi has barred Chinese satellite operators, including Chinasat and ApStar, from offering services in India. AsiaSat obtained a three-month extension.

In surveillance technology, an industry closely linked to broader electronics supply chains, India has sidelined Chinese firms such as Hikvision and Dahua Technology.