Alphabet Considers Moving Pixel Production to India Due to US Tariffs on Vietnam

Alphabet Inc, Google's parent company, has begun discussions with its contract manufacturing partners in India—Dixon Technologies and Foxconn—about moving a portion of global Pixel smartphone production from Vietnam to India. According to reports, the move is intended to fulfill shipments destined for the United States.

The first round of talks between Alphabet and the two manufacturers occurred about two weeks ago. The discussions reflect Alphabet's broader strategy to diversify its manufacturing base and reduce reliance on Vietnam in the face of potential tariff increases by the United States.

US tariffs prompt manufacturing recalibration

The threat of steep tariffs on Vietnamese goods drives the strategic shift. Vietnam is currently the main hub for Pixel production. However, the US administration, led by President Donald Trump, announced tariffs of up to 46% on Vietnamese imports, compared to 26% on goods from India.

Although a 90-day pause in reciprocal tariffs was declared on April 9, a 10% baseline tariff remains in effect. Notably, China, another major electronics manufacturing base, was excluded from the deferment and continues to face a 145% tariff.

Component localization is in focus

Alphabet also announced plans to manufacture key components in India, such as fingerprint sensors, batteries, chargers, and enclosures. Currently, most components used in Pixel phones assembled in India are imported. According to the news report, the goal is to reduce costs while increasing competitiveness by leveraging local sourcing.

India is speeding up talks with the United States to complete the first phase of a trade agreement by September or October. The two countries hope to increase bilateral trade from $190 billion to $500 billion by 2030. A favorable trade framework would further incentivize American tech companies such as Alphabet and Apple to expand manufacturing in India for export to the US.

Pixel Production in India

Dixon and Foxconn currently produce approximately 43,000 to 45,000 Pixel smartphones per month in India, exclusively for domestic sale. This effort is part of Alphabet's strategy to reduce import duties—India imposes approximately 16.5% in total import levies on smartphones—and compete more effectively in the premium category with rivals such as Apple and Samsung.

Foxconn began Pixel assembly at its Tamil Nadu facility in August of last year, focusing primarily on older models. Dixon, in collaboration with Taiwan's Compal Electronics, began production in December at its Noida facility and now produces 65-70 percent of Pixel units manufactured in India, including the latest generation, according to the report.

Although Alphabet had planned to establish India as a global Pixel manufacturing hub in two to three years, recent geopolitical and trade developments have accelerated the timeline. Aside from India and Vietnam, some Pixel units are also manufactured in China.

Google shifted Pixel production to Vietnam in 2023, primarily through Foxconn and Compal, in an effort to reduce reliance on Chinese manufacturing. According to reports, nearly half of all premium Pixel models were assembled in Vietnam last year.

Global Supply Expansion

An executive involved in the process stated that Alphabet intends to gradually increase Pixel exports from India to the United States. According to the report, the company is also considering expanding into new international markets.