Google has announced plans to shift its Pixel smartphone production from Vietnam to India, largely influenced by ongoing tariff concerns in the United States. While a temporary pause on tariffs is in effect, companies are still strategizing to optimize their supply chains and minimize exposure to potential tariffs that could be reinstated after this 90-day period.
Historically, the tariffs imposed during the Trump administration have led to significant price increases on imported products, particularly in the tech sector. Although smartphones, such as the upcoming iPhone models, have largely been exempt from these tariffs, uncertainties remain, especially regarding the possible introduction of tariffs on semiconductors.
This unpredictability has prompted companies like Google to reassess their manufacturing locations. According to recent reports, Google is in discussions with its manufacturing partners, Foxconn and Dixon Technologies, to expedite the transition of Pixel production to India.
This move is particularly aimed at boosting the manufacturing of units intended for the U.S. market. Alongside relocating production, Google is also considering sourcing various components—such as chargers, batteries, and fingerprint sensors—locally in India, reducing reliance on imports.
One key factor driving this decision is the difference in reciprocal tariffs; currently, exports from Vietnam to the U.S. carry a tariff of 46% while imports from India are taxed at 26%. If these tariffs are reinstated, more favorable tax rates for units produced in India could offer significant savings for Google.
Currently, the production capabilities in India stand at around 43,000 to 45,000 units per month, primarily focused on the local market. For Google to meet the anticipated demand in the U.S., particularly with the upcoming Pixel 10 launch, it will need to significantly increase its production capacity in India.