India's smartphone exports have seen a considerable boost, with the U.S. emerging as the largest recipient of these exports. According to data released by India's commerce ministry, India exported $2.43 billion worth of smartphones in April-May 2023, reflecting a significant increase in smartphone shipments to the U.S. specifically. The U.S. received $812.49 million worth of smartphone exports in April-May 2023, contrasting starkly with the previous year's figures of $92.2 million for the same period. Approximately one-third of all smartphone shipments in April-May were directed towards the U.S., followed by other countries such as the UAE ($484.52 million), the Netherlands ($205 million), the UK ($151.33 million), Italy ($136.57 million), and the Czech Republic ($115.5 million).

Recently, India has become an appealing location for electronics manufacturing, causing international tech companies to consider including the country in their production bases' portfolios. The government in New Delhi has launched a number of initiatives, such as the Product Linked Incentive (PLI), to attract big tech companies to India, thereby enhancing domestic manufacturing capacity. As explained by Varun Krishnan, Editor-in-Chief of FoneArena, one of the main causes for this shift in export destination to India is due to the incentives and monetary benefits of the PLI scheme for large companies willing to invest in India.

The PLI scheme aids companies meeting its eligibility criteria by providing them with benefits furnished by the Indian government. The ultimate goal of the PLI scheme is to establish India as a potential manufacturing hub for mobile phones and their components, thereby boosting domestic manufacturing, spurring employment opportunities, and fostering innovation and research and development in the field.

A separate factor that positions India as a global manufacturing hub is the growing geopolitical tension between China and the West. China has traditionally been seen as the world's factory, but companies like Apple have recently explored diversifying their manufacturing process outside of China, identifying India as a promising alternative location. Krishnan attributed India's increasing smartphone exports also to the need for an alternate supply chain to China, which has become unfavorable mainly due to political reasons.

Despite this progress, it will still take time for India to surpass China as a manufacturing leader as the majority of current manufacturing operations in India are still related to assembly activities. Former Reserve Bank of India (RBI) Governor Raghuram Rajan has expressed concerns about India's PLI scheme and has noted that the rise in smartphone exports does not demonstrate proficiency in manufacturing. Rajan has argued that more attention should be given to the value added by manufacturing in India. This would be achieved when India starts producing its own component parts such as processors, lenses, batteries, displays, and more. Krishnan echoed this sentiment, noting that India should improve its manufacturing abilities, and upgrade from assembly to comprehensive manufacturing.