Motorola Enhances Production in India to Mitigate Tariff Impacts
Motorola is increasing smartphone production in India to reduce reliance on China due to U.S. tariffs. The company aims to boost exports, primarily to the U.S., from 13 million units to as many as 30 million. However, potential reciprocal tariffs may force a reduction in Indian manufacturing and a shift to Vietnam. The ongoing negotiations between India and the U.S. are crucial for maintaining competitive export conditions.
Motorola is enhancing its production capabilities in India as part of its strategy to transition away from China, following increased tariffs imposed by the Trump administration on mobile imports. Atul Lall, managing director of Dixon Technologies, confirmed the expanding relationship with Motorola, stating, “Our relationship with Motorola, the volumes, and numbers are expanding, both for the domestic market and export markets. We are still finalising the final volumes, but there is going to be a significant upside.”
The company currently produces 13 million units and plans to scale this up to between 23 and 30 million units next fiscal year, with a strong emphasis on exports to the U.S., according to the India Cellular and Electronics Association (ICEA). Motorola has established itself as a significant player in the U.S. smartphone market, having acquired a 10% market share as of Q4 2024, as reported by Counterpoint Research.
Presently, Motorola exports approximately 20-25% of its production, equating to around 2.2 million units to North America. Anticipated tariff adjustments could propel this figure to between 12 and 18 million units in the forthcoming fiscal year. Concurrently, Samsung also plans to ramp up its operations in India through original design manufacturers (ODMs) in response to tariff implications from China.
However, Motorola is actively monitoring the potential impact of reciprocal tariffs from the U.S., expected to take effect from April 2. India imposes a 16.5% customs duty on fully assembled mobile phones, and should the U.S. reciprocate this tariff, it may prompt Motorola to reduce its production in India to 8 to 10 million units, with a possible relocation of manufacturing to Vietnam, where tariffs are at zero percent.
In addition to India, Motorola maintains manufacturing facilities in China, Brazil, and Argentina. Currently, trade negotiations are underway between New Delhi and Washington to establish a mutually beneficial agreement. Industry advocates have called for reduced import duties on consumer electronics from the U.S. to maintain India’s competitiveness in global exports.
Motorola’s initiative to boost its Indian production aims to navigate the challenges posed by tariff changes and to fortify its position in the global smartphone market. With ambitious plans to escalate exports significantly, Motorola is adapting to market dynamics while its potential response to U.S. tariffs highlights the importance of favorable trade relations for continued growth.
Original Source: manufacturing.economictimes.indiatimes.com
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