- India’s technology landscape is undergoing a rapid transformation. Over the past decade, the country has shifted from being a massive consumer of smartphones to an emerging global hub for their assembly and, increasingly, semiconductor ambitions. Yet, these aspirations unfold against the backdrop of shifting global trade dynamics and uncertainties over tariffs.
Smartphone Manufacturing: From Assembly to Scale
India is now the world’s second-largest smartphone market, and local production has ramped up significantly. Global brands, from Apple to Samsung, are expanding their assembly operations under the government’s Production-Linked Incentive (PLI) scheme. This has helped India reduce import dependence and attract billions in investment.
But the journey is far from over. While assembly has become widespread, the next challenge lies in building a robust supply chain of components everything from batteries and displays to advanced processors. Unless India moves deeper into this value chain, its role risks being limited to assembly lines rather than full-scale innovation.
The Semiconductor Push
Semiconductors form the foundation of modern electronics. India, despite its strength in chip design talent, still imports the vast majority of chips. To change this, the government has announced multi-billion-dollar support packages to encourage global chipmakers to set up fabrication units in India.
Projects like the Tata Group’s chip manufacturing plans and partnerships with global players show India’s seriousness in this space. If successful, this could reduce import reliance, boost exports, and create a strong ecosystem for future technologies like AI, EVs, and 5G.
Tariff Uncertainty: A Double-Edged Sword
Trade policies and tariff structures play a pivotal role in shaping these ambitions. On one hand, tariffs on imported phones and components encourage local manufacturing. On the other, sudden changes or inconsistencies in tariff rules create uncertainty for investors.
For example, higher tariffs can make devices costlier for consumers in the short term, potentially slowing adoption of new technologies. Meanwhile, global firms seek predictability without it, they may hesitate to commit large-scale investments.
Despite these hurdles, India’s trajectory remains promising. The country’s large domestic market, coupled with proactive industrial policies, makes it a serious contender in the global technology supply chain. Over the next decade, the twin ambitions of smartphone leadership and chip independence will likely shape India’s position in the world economy.
The key will be balancing tariff policies with long-term growth, fostering local innovation, and ensuring India moves beyond assembly to become a true technology powerhouse.