Apple tempted by India! In shift away from China, 70-80 million iPhones to be made in India soon amid Trump tariff tensions
Apple aims to significantly increase iPhone production in India as part of its strategy to diversify manufacturing away from China and protect against uncertainties stemming from
under the
administration.
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Currently, the company produces approximately 40-43 million iPhones annually in India, with about 80% for export markets, according to industry data. Production could increase to 70-80 million units by late 2026, positioning India as the primary iPhone supplier to the United States.
The company produces iPhones in India through
and
, with Tata Electronics having acquired Wistron and Pegatron's facilities in the country.
Industry experts indicate this transition could result in India manufacturing nearly 40% of global iPhone sales within the next 18 months, an increase from the present 18-20%.
Apple's India Plans
Government officials informed ET they will collaborate with Apple and its suppliers to facilitate this transition, which would substantially strengthen India's electronics manufacturing sector.
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"As per our estimates, Apple has reached a production scale of around 40-43 million iPhones in India for both domestic consumption and exports, amounting to 17-20% of its global shipments in 2024," said Navkendar Singh, associate vice president, IDC India.
Singh noted that doubling iPhone production in India would require scaling up to 70-80 million units annually, significantly boosting India's expanding electronics manufacturing ecosystem.
Apple, having established India as its second global iPhone manufacturing hub, is rapidly increasing its production capacity in this South Asian nation, which also represents the world's second-largest smartphone market.
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Apple's suppliers exported iPhones worth nearly Rs 1.5 lakh crore in FY25, increasing from Rs 85,000 crore in FY24.
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The relocation of iPhone manufacturing will largely depend on India's standing in the evolving geopolitical landscape and the conditions of the proposed US trade agreement. Should the Trump administration adopt a lenient stance towards China, the transition to India could be slower.
According to an industry insider, the relocation of global value chains (GVCs) will also depend on whether India implements substantial reforms to tackle ongoing cost inefficiencies and policy uncertainties related to taxes and tariffs, ensuring production doesn't divert from China to countries such as Vietnam.
The India Cellular and Electronics Association (ICEA), whose members include Apple and other major electronics companies, indicates that India faces a cost disadvantage of 7% to 7.5% compared to Vietnam and China. Additional streamlining, particularly of crucial sub-assemblies and components, would enhance India's competitive position.
A Niti Aayog study on electronics GVCs emphasises the necessity to reduce component tariffs to match China and Vietnam's levels, as current rates disadvantage Indian exports.
The study additionally recommends harmonising direct and indirect tax structures to align with competing nations' offerings.
Despite India's advantageous position compared to China and Vietnam under Trump's new tariff system, experts suggest that New Delhi must strategically negotiate to secure a beneficial long-term agreement with the US, whilst outmanoeuvring its manufacturing competitors.
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