Samsung in talks on production shift from Vietnam to India

Samsung is reportedly considering moving part of its smartphone and electronics production from Vietnam to India.

The move comes after the US imposed a 46% tariff on Vietnamese goods, while Indian goods face only a 10% tariff with a 90-day delay.

Vietnam has been a key export base for Samsung, shipping US$52 billion worth of smartphones in the 2023-24 fiscal year.

The potential shift to India reflects a broader trend among global tech firms aiming to diversify their production and take advantage of India’s production-linked incentives.

🔗 Source: Inc42

🧠 Food for thought

1️⃣ Tariff-driven manufacturing migrations follow predictable patterns

The Samsung development reflects a larger tariff-induced manufacturing migration cycle that has been documented since 2018, when manufacturing first shifted from China to Vietnam.

When the US imposed Section 301 tariffs on approximately 50% of Chinese exports, Vietnam experienced a quarterly increase of $1.1 billion in US exports on tariffed goods, transforming it into an electronics powerhouse 1.

Vietnam’s strategic advantages, including a long coastline with multiple seaports, proximity to suppliers, and labor costs of $2-3 per hour (versus China’s $6-8), drove its rapid rise in electronics manufacturing 2.

The announced 46% tariff on Vietnamese goods highlights how manufacturing often shifts to countries offering cost advantages combined with policy stability.

The 90-day pause gives companies like Samsung critical time to reconfigure supply chains, reflecting how modern manufacturing requires both agility and long-term planning when navigating geopolitical disruptions.

2️⃣ Vietnam’s electronics surge offers blueprint for India

Vietnam’s transformation into an electronics manufacturing powerhouse happened remarkably fast, with its electronics exports reaching $140 billion in 2023, accounting for 40% of its total exports 3.

This growth was driven by specific policy mechanisms: removing local content requirements, offering competitive tax incentives, and creating a business-friendly regulatory environment that attracted major manufacturers including Samsung 4.

Vietnam’s collaboration with large investors like Samsung created 1.3 million jobs and developed a robust local supplier ecosystem, with female employment in the electronics sector increasing fivefold since 2012 4.