Google’s parent company, Alphabet Inc, has started moving its Pixel smartphone production from Vietnam to India, according to a report by Economic Times. The company began making phones in India in August 2024 and is now planning to make more phones there in the coming years. This big move comes as Google tries to avoid paying high special taxes that the US puts on goods coming from countries like Vietnam and China.
Why Google is Moving Phone Production to India
The main reason for this move is something called “tariffs” – these are special taxes that countries charge on products coming from other countries. Think of tariffs like toll gates – if you want to bring products into a country, you have to pay extra money at the gate. The US has put high tariffs on goods from Vietnam (10%) and China (34%), which makes it very expensive for Google to make phones there and sell them in America.
Donald Trump’s government has been putting these special import taxes on many countries. For Google, this means their phones would become more expensive if they keep making them in Vietnam. By moving to India, which has lower effective tariffs for smartphones, Google hopes to keep their phone prices from going too high.
Current Production Numbers
Right now, Google is making about 45,000 Pixel phones every month in India. This is still quite small compared to what they were making in Vietnam. In 2023, Vietnam was producing about 375,000 Pixel phones monthly – that’s about eight times more than what India is making now. In simple terms, if we think of phone production as making cups of tea, India is currently making 1 cup for every 8 cups Vietnam was making before.
| Country | Monthly Production (2023) | Percentage of Total |
|---|---|---|
| Vietnam | 375,000 phones | About 50% of all Pixel phones |
| India | 45,000 phones | About 12% of what Vietnam made |
How US Taxes Affect Phone Costs
These tariffs have a big impact on how much it costs to make and sell phones. When the US charges a 34% tariff on goods from China, it means for every ₹1,000 worth of phone parts from China, companies must pay an extra ₹340 just to bring them into the US. For Vietnam, with a 10% tariff, they pay an extra ₹100 per ₹1,000 worth of goods.
These extra costs add up quickly. Reports suggest that these tariffs could cost US families between $1,200 to $1,300 (about ₹1,02,234 to ₹1,10,753) in 2025 because products become more expensive. This is why Google is looking for ways to avoid these high taxes.
| Country | General Tariff Rate | Special Smartphone Exemptions? |
|---|---|---|
| China | 20% (as of April 2025) | Yes – some exemptions |
| Vietnam | 46% | Yes – some exemptions |
| India | 27% | Yes – some exemptions |
Google’s Plan for Making Phones in India
To make this move successful, Google is working with manufacturing partners – these are companies that specialize in building electronic devices. In India, Google is partnering with Foxconn and Dixon. These companies are like expert chefs who know how to cook up smartphones using Google’s recipes (designs).
Google is also trying to source components locally. This means finding parts for their phones from suppliers in India instead of importing them from other countries. It’s like buying vegetables from your local market instead of ordering them from far away. This helps avoid those extra import taxes and can make the whole process cheaper.
This strategy is similar to what Apple has been doing. Apple has already moved some of its iPhone production to India for similar reasons – to avoid high tariffs and to be closer to a growing market. Google seems to be following Apple’s footsteps in this smart business move.
Benefits of Moving Production to India
- Lower costs due to reduced tariffs when shipping to the US
- Diversification of manufacturing locations (not keeping all eggs in one basket)
- Potential to source parts locally, further reducing costs
- Being closer to India’s growing smartphone market
- Building better relationships with the Indian government
In 2023, Google made about 9 million Pixel phones in total between Vietnam and China. Now with this shift, they’re planning to gradually increase how many they make in India. While the current 45,000 monthly phones might seem small, it’s just the beginning of what could be a much larger operation.
This move shows how global trade policies can cause big companies to change where they make their products. For Google, moving phone production to India is not just about saving money today – it’s about planning for a future where making things in different places gives them more flexibility and security.
