Amid the shifting sands of global geopolitics, particularly the USA’s intense efforts to reduce dependency on China, India stands poised to capture a significant share of the global pie amidst realigning supply chains. This is especially true in electronics manufacturing, but also increasingly in the pharmaceuticals and retail sectors. However, turning this opportunity into long-term gains requires India to act decisively, address structural shortcomings, and invest in building technology prowess and competitiveness in these sectors.
Building India’s Strength in Electronics Manufacturing
The most tangible shift is evident in the electronics manufacturing sector, where India is already seeing gains. According to Counterpoint Research, China's share of global smartphone production is expected to drop from 64% in 2024 to 55% by 2026. India’s share, on the other hand, is projected to rise from 18% to 25–28% during the same period—thanks to US tariffs on Chinese goods and India’s proactive manufacturing incentives. Several companies have already committed to enhancing their India play.
- Apple leads this pack. The tech giant plans to move production of over 60 million iPhones annually sold in the US to Indian factories by the end of 2026. Apple has already assembled $22 billion worth of iPhones in India in the 12 months through March 2025—up 60% year-on-year. Its supplier, Foxconn, has announced a $1.5 billion investment into its India unit to expand capacity, signaling Apple’s long-term commitment to India.
- Google's parent company, Alphabet, has also fast-tracked plans to shift significant Pixel phone production from Vietnam to India amid looming US tariffs on Vietnamese imports. The company is in talks with local manufacturers such as Dixon Technologies and Foxconn and is working to localize key components like batteries and fingerprint sensors in India.
- Samsung, too, is considering relocating some of its Vietnam-based production to India, in response to steep tariffs on Vietnamese goods.
- Other global electronics players including HP and Dell are beginning to follow suit. HP, in partnership with Dixon Technologies, plans to double its PC and laptop production in India this year under the government’s Rs 17,000 crore production linked incentive (PLI) scheme for IT hardware.
However, India's share in the global laptop manufacturing market is still under 4% (as of 2024), far behind China’s 75%. Counterpoint estimates that with strategic incentives and infrastructure upgrades, India could increase this to 7% by 2026. But challenges such as inadequate component supply chains, high import tariffs, and policy unpredictability remain significant hurdles.
Creating a Globally Competitive Pharma Industry
India’s pharmaceutical sector also has a golden chance to step up. With the US looking to de-risk from Chinese APIs (active pharmaceutical ingredients), India can become the next major pharma supplier, provided it addresses some longstanding weaknesses. This includes improving API infrastructure, ramping up innovation, and ensuring better regulatory coordination.
Companies like Sun Pharma, Dr. Reddy’s Laboratories, and Cipla are increasingly investing in R&D and building global-scale production hubs in India. Lupin, for example, recently announced expansion plans to enhance export capacity and API manufacturing. Meanwhile, Biocon is exploring partnerships in Africa and Southeast Asia to diversify its export base, and Serum Institute of India is pushing into biosimilars and mRNA technology platforms to expand its global footprint.
Domestically, there's also significant headroom for growth. Nearly 900 million Indians still pay full price for medicines. With better access and policy support, India can create a more equitable and globally competitive pharma industry.
Catalyzing a New Era in Retail and FMCG
Beyond electronics, India also has a chance to cement itself as a key player in global retail and FMCG supply chains. The temporary 90-day US tariff pause offers a window to scale up exports, especially in high-potential categories like organic packaged foods, Ayurveda-based personal care products, and wellness goods. Experts believe that if India moves quickly to strengthen packaging, automation, and quality assurance, it can emerge as a consistent and reliable supplier to the US.
Several companies are already taking steps in this direction. Patanjali Ayurved, Dabur, and Emami have announced plans to expand their export portfolios to North America and Europe, focusing on Ayurveda-based personal care and wellness products. Tata Consumer Products has stepped up its export-oriented manufacturing, particularly in teas and ready-to-eat packaged goods. Similarly, Marico and Godrej Consumer Products are increasing investments in product innovation and supply chain resilience to tap into global demand.
This push is not just about tapping into current US demand—it’s also about repositioning India as a long-term strategic partner. Streamlining regulations, digitizing compliance systems, and investing in cold chain and packaging tech will be critical to success.
Competition and Challenges
Despite these bright spots, India’s aspirations face stiff competition from countries like Vietnam, Mexico, and Thailand. Vietnam, for instance, boasts lower labor costs and mature electronics ecosystems, while Mexico enjoys tariff-free access to the US via the USMCA.
As per Canalys, 79% of Dell’s laptops were made in China in 2024, but the company plans to shift over half of that production to Vietnam by 2026. HP is diversifying to Taiwan and Mexico. India still lags due to weak logistics, lack of skilled labor, and inconsistent policy enforcement.
India’s relatively high tariffs on components and infrastructural bottlenecks limit its attractiveness for companies that need quick and cost-effective diversification from China. Without long-term planning and structural reforms, India risks becoming just an assembly line, not a true manufacturing powerhouse.
Technology as a Game-Changer
One of India’s biggest levers to close this gap is technology adoption across sectors. In manufacturing, investing in robotics, IoT, and AI-driven process optimization can drastically improve productivity and quality assurance, allowing India to match or exceed global standards.
In pharma, technologies such as blockchain can ensure traceability and transparency, helping Indian exports comply with stringent US and EU regulations. AI-driven drug discovery platforms and automated quality testing are also being adopted by companies like Dr. Reddy’s and Biocon to reduce R&D timelines and meet global quality norms.
In retail, the use of data analytics, AI-powered inventory management, and next-gen packaging and logistics solutions will be essential to win global trust and scale exports. For example, smart cold chain logistics can unlock new export categories like frozen ready meals and organic produce.
Government and private partnerships in skilling programs—especially in digital manufacturing, bioinformatics, and packaging tech—can further accelerate India’s rise across these sectors.
A Race Against Time
While the short-term tariff reprieve gives India a cost advantage—10% US tariffs on Indian goods vs 30% on Chinese products—this window may not last. A recent US-China trade reset has already seen Chinese tariffs drop from 145% to 30%, while India’s remained at 27%, threatening to reverse some of the early gains.
Analysts caution that the redirection of trade flows toward India could stall or even reverse unless India takes swift and strategic steps to cement its role in the supply chain. India must not only address its weaknesses but also double down on bilateral trade negotiations and free trade agreements to provide long-term certainty for investors.
Conclusion: Playing the Long Game
India is at a pivotal moment. It can either seize this unique global opening to become a central node in global manufacturing and retail value chains—or miss the bus. With timely policy action, structural reforms, and aggressive technology adoption, India can convert a temporary tariff window into a long-term economic transformation.
But the clock is ticking. The decisions made in the next 12–24 months—by industry and government alike—will define whether India watches the global supply chain realignment from the sidelines or leads it from the front.
