Google shifts Pixel production from Vietnam to India—Here's why
What's the story
Google is in talks with its local contract manufacturers Dixon Technologies and Foxconn to shift some of the global production of Pixel smartphones from Vietnam to India. The move is primarily aimed at lowering tariffs for devices going to the US market. The first round of talks happened about two weeks ago, two industry executives told the Economic Times.
Tariff impacts
Shift driven by US tariff concerns
The decision to shift production is also part of Alphabet's (parent company of Google) strategy to diversify its sourcing options. The move comes as a response to the possibility of high tariffs on Vietnam, which is currently the main manufacturing base for Pixel smartphones. According to reports, the company has also shared plans with its contract manufacturers to localize some components in India. These include enclosures, chargers, fingerprint sensors, and batteries.
Tariff details
US tariffs on imports from Vietnam and India
US President Donald Trump had earlier announced a 46% tariff on imports from Vietnam, as opposed to 26% on those from India. While the reciprocal tariffs were suspended for 90 days on April 9, a baseline tariff of 10% still exists. This production strategy shift is part of Alphabet's larger plan to make India a global manufacturing hub for Pixel smartphones over the next two or three years.
Production details
Current production and future plans
Currently, Dixon Technologies and Foxconn are producing 43,000-45,000 Pixel smartphones a month in India. These are only for the local market as Alphabet hopes to reduce duty impact and compete with Apple's iPhone and Samsung Galaxy models. Dixon makes nearly 65-70% of the Pixels manufactured in India, while Foxconn concentrates more on older models.
Production expansion
Alphabet's future plans for Pixel production
Alphabet is looking to gradually ramp up exports from India to the US and is also considering supplies to other countries. Despite its super-premium pricing, Pixel's share of the Indian smartphone market has improved over the last year after it began selling devices offline too. In the US, Pixel gained nearly 14% market share after the launch of new models, up from around 7% at end of last year.