The Indian government’s tariff-led strategy to boost domestic, high-tech manufacturing under the “Make in India” program is bearing fruit. The first sales of Apple’s iPhone Xr have gone on sale that were manufactured in India, for the Indian market according to the Wall Street Journal.

Panjiva’s data shows Apple had already scaled back its imports of phones. Shipments associated with Apple’s iPhone fell 69.2% year over year in July after being unchanged in 2Q. There’s been a scaling up in imports of the Mac line of computers at the same time with a 208% rise in July following a 4.8% improvement in 2Q.

Chart segments Indian imports associated with Apple by product (HS-4) on a monthly and three-month average basis.  Source: Panjiva 

Apple’s phones are not the only ones being produced in India of course, with components being imported by Samsung and Flextronics among others. Yet, total Indian imports of components were unchanged in July after dropping by 5.2% year over year in 2Q. 

That was led by a slump in imports from China, which represented 77.0% of the total in the 12 months to Jul. 31 and which dropped by 10.8% in July after a 28.7% contraction in 2Q.

In part that represents a restructuring of supply chains in favor of Vietnam, including shipments by Samsung Electronics in particular, which jumped 126% in July after a 305% surge in 2Q.

Furthermore there may be a long-term cost to India’s trade relations with other countries of the Make in India policy. As outlined in Panjiva’s research of Oct. 15 India’s industrial policy may be holding up the Regional Comprehensive Economic Partnership trade deal with China. That could especially worsen if Indian phones are exported to the U.S. in the event that the latter’s tariffs on Chinese exports are increased in mid-December.

Chart segments change in Indian imports of telecoms components by origin.  Source: Panjiva