According to Nikkei Asia, Google has instructed suppliers to begin producing Pixel smartphones in India by the upcoming quarter at the latest. This move highlights the search engine giant’s intention to diversify its supply chain beyond China and take advantage of the expanding Indian smartphone market.

According to a person with direct knowledge of the situation, Google has set an ambitious goal to ship over 10 million Pixel phones this year. This is in addition to the roughly 10 million units that were sent for the first time in 2023 during a worldwide economic slump.

According to various sources familiar with the plan, Google will start setting up the production line for its high-end Pixel 8 Pro in the southern portion of India in the coming weeks, and start shipping phones in the April-June quarter. They stated that around the middle of this year, the Pixel 8 will start to be produced in the northern part of the nation.

Due to the recent influx of assembly and component suppliers into India by businesses like Apple, Samsung, Oppo, and Xiaomi, there are now developing smartphone manufacturing hubs in both of these regions of the nation.

Google has already had vendors producing its phones in Vietnam for years amidst an intensifying tech war between Washington and Beijing; but, the firm is making a significant adjustment in its supply chain strategy with the launch of its India Pixel production, albeit in limited volumes at first. Prior to this, most Google Pixel phones were made in China.

“There are other internet companies than Google that have begun to search for a ‘China+2’ strategy. According to one of the individuals, “This means that suppliers should have multiple non-China options for better supply chain resilience, as diversifying away from China into another location is not enough.”

At a time when the smartphone market as a whole is slowing down, the company said last year that its first made-in-India Pixel phones will be available this year, joining Apple and Samsung in targeting the sizable and expanding Indian market.

According to data from research firm IDC, the Indian smartphone market increased by 1% annually to reach 146 million devices in 2023. The growth rate in the second half of the year was 11% higher than the previous year. In contrast, the worldwide smartphone market is expected to fall by 4.7% overall in 2023. According to IDC’s data, the largest smartphone market in the world, China, experienced a 5% decline last year.

“Google has set an ambitious goal of [shipping] another 10 million units in 2024 after reaching a milestone with its Pixel phones last year,” a second source with direct knowledge told Nikkei Asia. In light of Huawei’s growing HarmonyOS user base and Samsung’s attempt to become the world’s largest smartphone manufacturer to change the default search engine on its phones, maintaining Google’s Pixel phone business is critical to the long-term viability of its search engine and mobile operating system ecosystem, the person continued.

Google’s plans to manufacture phones coincide with the government of India’s aggressive efforts to establish the nation as a hub for IT manufacturing. To this end, the government is considering tightening import restrictions and providing incentives to companies that establish local supply chains for PCs and mobile devices. In order to swiftly establish an iPhone supply chain ecosystem outside of China, Apple has instructed suppliers to increase their investments in India. According to Nikkei Asia, two of the largest PC manufacturers in the world, Taiwan’s Acer and Asustek Computer, intend to increase production in the nation this year.

“The U.S.-China trade conflict led Google to decide to shift some of its Pixel phone manufacture to Vietnam. Regarding its expansion into manufacturing in India, Eddie Han, research director of Isaiah Research, told Nikkei Asia, “We think the company also considers the nation’s investment incentives, import tariff policies, as well as its massive domestic market.”

Han added that Samsung has two manufacturing facilities for its devices outside of China, in Vietnam and India, in addition to Google.