In recent years, Apple Inc. has been strategically realigning its global manufacturing operations, with a significant emphasis on expanding iPhone production in India. This move is driven by a combination of factors, including escalating trade tensions between the United States and China, the need for supply chain diversification, and the burgeoning potential of the Indian market.
Surge in Indian iPhone Production
As of early 2025, Apple’s iPhone production in India has experienced a remarkable surge. Reports indicate a 53% year-over-year increase, with production reaching approximately 23.9 million units. This accounts for about 17% of Apple’s global iPhone output, a substantial rise from previous years. This growth is largely attributed to Apple’s collaboration with key manufacturing partners such as Foxconn and Tata Electronics, who have been instrumental in scaling up production capabilities within the country.
Strategic Diversification Amid Global Trade Tensions
The intensifying trade disputes between the U.S. and China have prompted Apple to reassess its manufacturing dependencies. By shifting a significant portion of iPhone production to India, Apple aims to mitigate potential risks associated with tariffs and supply chain disruptions. This strategic move not only reduces reliance on Chinese manufacturing but also aligns with global trends of supply chain diversification.
Government Incentives and Policy Support
The Indian government’s proactive policies have played a pivotal role in attracting Apple’s manufacturing operations. Initiatives like the Production-Linked Incentive (PLI) scheme have offered substantial subsidies to boost domestic manufacturing. Although the PLI scheme is set to phase out by mid-2026, it has already contributed to nearly $200 billion in production and the creation of over 1.2 million jobs up to the fiscal year 2024-25. To sustain this momentum, the government plans to introduce a new Rs229 billion ($2.76 billion) Component Manufacturing Scheme, aiming to position India among the top global electronics manufacturers.
Challenges in Supply Chain Localization
Despite the significant progress, Apple faces challenges in fully localizing its supply chain in India. While assembly operations have been successfully established, the production of critical components such as displays and chipsets remains concentrated in other regions. These components require substantial capital investment and advanced technology, making localization a complex endeavor. Consequently, the cost of finished goods remains relatively unchanged, underscoring the need for further development in India’s component manufacturing capabilities.
Economic Impact and Market Potential
The expansion of iPhone production in India has had a positive impact on the country’s economy. In 2022, the shipment volumes of iPhones manufactured in India increased by 65% year-over-year, with the value of these shipments rising by 162%. Apple accounted for 25% of the value of India’s total smartphone shipments, up from 12% in 2021. This growth reflects the increasing importance of India in Apple’s global strategy and the potential of the Indian market as both a manufacturing hub and a consumer base.
Future Outlook
Looking ahead, Apple plans to further increase its production capacity in India. By 2025, the company aims to produce 30 million iPhones in the country, doubling the previous year’s output. This ambitious target is supported by ongoing investments in infrastructure, workforce training, and partnerships with local manufacturers. Additionally, Apple is set to begin production of the iPhone 17 in India by the second half of 2025, marking the first time that new product introduction (NPI) for an iPhone will occur outside of China. This move signifies a significant milestone in Apple’s efforts to diversify its supply chain and reduce dependency on a single manufacturing base.
Conclusion
Apple’s strategic shift to expand iPhone production in India is a multifaceted approach aimed at mitigating geopolitical risks, capitalizing on government incentives, and tapping into the growing Indian market. While challenges remain in fully localizing the supply chain, the progress made thus far underscores India’s emerging role as a key player in global electronics manufacturing. As Apple continues to invest in and collaborate with Indian partners, the country’s significance in the company’s global operations is poised to grow, reflecting broader trends in global supply chain realignment.
