Exports of smartphones from India to the US via airfreight have grown rapidly since the start of the year, while volumes from China have been trending downwards.
Research from consultant Aevean shows that India’s recent market share gains mean it has now overtaken China to become the largest exporter of smartphones to the US by air.
Aevean figures show that in December, the volume of smartphones being exported out of China began to decline from the 6,000 tonnes per month recorded in November to just under 5,000 tonnes.
The decline continued over the following months – other than a pre-tariff front-loading boost in March – and by April had declined to around 1,000 tonnes per month.
In contrast, India has seen its smartphone exports by air increase from around 500 tonnes per month in November to just under 2,000 tonnes per month in April.
According to the Economic Times of India, Chinese smartphone companies have been switching production to India as a result of government encouragement, changing strategies and geopolitical factors.
Government encouragement includes the launch of the Production Linked Incentive scheme. These schemes helped smartphones become India’s largest export item last year.
Major manufacturers such as Samsung and Apple have been ramping up smartphone production in India over the last year.
The figures are also one example of how the US tariff war on China has affected the air cargo market in recent months, with companies looking to move some production away from China as one of the worst hit by tariffs from the White House.
US president Donald Trump first announced tariffs on China of 10% in early February under the International Emergency Economic Powers Act (IEEPA).
In early March, a further 10% was added, while in early April, new tariffs were added at a rate of 34% before reaching as high as 145% later in the month as the trade war between China and the US reached its pinnacle.
The de minimis exemption allowing e-commerce packages to enter the US duty-free was also removed, meaning these shipments would now need to pay tariffs when being transported on a commercial airline.
However, in mid-April, many electronics products, including laptops and smartphones were exempted from the tariffs so May’s figures could show a switch back to China.
Also, in early May, a 90-day partial suspension of the trade war was announced, with the US lowering its tariffs to 30%.
The move of manufacturing to India has not escaped the notice of Trump, however. In May, the president threatened smartphone manufacturers with tariffs of 25% for phones built outside the US in response to the move of production to places like India.
It is not just smartphone exports that have been moving out of China.
Figures from Aevean also show that laptop exports to the US via air have shifted from China to Vietnam.
Data from the company shows that the number of laptops transported by air cargo out of Vietnam increased by 4,400 tonnes in April compared with the level recorded in February, when around 2,500 tonnes of laptops were exported out of the country.
