Motorola has been steadily increasing its manufacturing footprint in India, leveraging local production incentives. The company, which currently produces 13 million smartphones annually, plans to increase this to 23-30 million units in the next fiscal year. A large portion of this increased output will be exported, with the U.S. as a primary destination, according to the India Cellular and Electronics Association (ICEA).
Dixon Technologies, one of Motorola’s key manufacturing partners, has confirmed growing orders from the brand. “We have been consistently producing over 1 million units per month, and the order book looks strong for the coming months,” said Atul Lall, Managing Director, Dixon Technologies.
Impact of U.S. Tariffs on China and Motorola’s Shift to India
The U.S. government’s increased tariffs on Chinese imports, including mobile phones, has prompted smartphone brands to explore alternative manufacturing locations. Samsung has already expanded its production in India, and Motorola is following suit to mitigate the impact of rising costs in China.
Currently, Motorola exports 20-25% of its production (around 2.2 million units) to North America. This is expected to more than double to 12-18 million units in the coming fiscal year, as the company takes advantage of India’s PLI scheme.
Challenges: Reciprocal Tariffs and Cost Considerations
Despite its expansion plans, Motorola is also monitoring potential reciprocal tariffs from the U.S. on Indian imports, which could take effect from April 2. If the U.S. imposes a 16.5% tariff on smartphones imported from India, the company may scale down its production in India to 8-10 million units and shift operations to Vietnam, where tariffs remain at 0%.
Industry leaders are urging the Indian government to negotiate a favorable trade agreement with the U.S. to keep exports competitive. Discussions are ongoing to reduce import duties on U.S. electronic goods, which could help sustain India’s position as a key smartphone manufacturing hub.
Conclusion
Motorola’s decision to expand production in India aligns with the country’s growing role as a global manufacturing hub. However, the success of this shift depends on trade negotiations, tariff policies, and cost competitiveness. If India can secure favorable trade terms, it could further solidify its position as a major player in global smartphone exports.
