Apple’s Shift Toward India for iPhone Manufacturing
As part of its ongoing strategy to reduce reliance on China, Apple has significantly expanded its iPhone manufacturing operations in India. In just the first half of the fiscal year 2024, Apple exported nearly $6 billion worth of India-made iPhones, a figure that reflects a 33% increase over the same period last year. This rapid growth puts Apple on course to exceed $10 billion in exports by the end of the fiscal year, underscoring India’s rising importance in the tech giant’s global manufacturing and supply chain strategy.
Apple’s pivot to India reflects a multi-pronged approach that leverages India’s skilled workforce, government subsidies, and improving technology infrastructure. As geopolitical tensions escalate between the United States and China, Apple’s diversification efforts have accelerated, positioning India as a critical hub in its production landscape.
Key Players in India’s iPhone Production
Three major suppliers, Foxconn Technology Group, Pegatron Corp., and Tata Electronics, anchor Apple’s India-based assembly operations. Of these, Foxconn’s facility near Chennai is the most significant, responsible for about half of the iPhones exported from India. This facility has become a linchpin for Apple’s manufacturing expansion and export activities in the region.
Additionally, Tata Group has emerged as a vital partner for Apple. The Indian conglomerate produced $1.7 billion worth of iPhones from its Karnataka plant in the past six months. Tata’s growing role marks a landmark development, as it is the first Indian company to take on the assembly of Apple’s flagship devices, having acquired the factory from Wistron Corp. in 2023. This partnership underscores Apple’s commitment to fostering local business collaborations as it grows its footprint in the region.
Boost to India’s Smartphone Exports
India’s increased iPhone production has transformed its smartphone export sector. iPhones now represent India’s largest smartphone export category, with the U.S. as a primary destination. Between April and September 2024, India’s smartphone exports to the U.S. reached $2.88 billion, a staggering jump from just $5.2 million five years ago, before Apple began ramping up local production.
Despite holding under 7% of India’s smartphone market, Apple has ambitious plans to increase its presence. By producing high-end models like the iPhone 16 Pro and Pro Max in India, Apple has tapped into subsidies offered by the Indian government, which encourages foreign investment in technology manufacturing. These subsidies, alongside a fast-growing middle class and expanding e-commerce presence, provide Apple with ample opportunity for growth in the Indian market.
Expanding Apple’s Retail Presence in India
Complementing its manufacturing shift, Apple has expanded its retail footprint in India, opening flagship stores in Mumbai and Delhi in 2023. Apple plans to open additional stores in cities like Bangalore and Pune, with a strong focus on combining retail presence with an aggressive online sales strategy. This retail growth, bolstered by a rising interest among Indian consumers for Apple products, contributed to a record $8 billion in revenue for Apple’s India operations for the fiscal year ending March 2024.
India’s Rising Potential Amid China’s Slowdown
Apple’s growth trajectory in India contrasts sharply with its recent challenges in China, where economic factors like the post-COVID recovery and a property market slowdown have affected consumer spending. However, China remains essential to Apple’s global operations, both for manufacturing scale and for the sizable consumer market it represents. While India’s manufacturing role continues to expand, industry experts agree it is unlikely to fully replace China in Apple’s supply chain in the near future.
In the fiscal year ending March 2024, Apple assembled approximately $14 billion worth of iPhones in India—double the previous year’s production. Of this, around $10 billion worth was exported, highlighting the company’s focus on India as a manufacturing hub and key contributor to its global supply chain diversification strategy. As Apple’s presence in India grows, the country is poised to play an even more significant role in the company’s long-term production and export plans.
India’s Growing Role in Apple’s Global Vision
Apple’s rapid expansion in India is more than just a strategic move; it’s a testament to India’s evolving status as a global manufacturing powerhouse. As Apple continues to diversify its supply chain, India’s skilled labor force, government incentives, and expanding consumer market position the country as a pivotal player in the company’s long-term plans. While China remains crucial to Apple’s operations, India’s rise marks a turning point in tech manufacturing, creating a ripple effect that could redefine the global electronics landscape.
Apple’s commitment to local partnerships, retail expansion, and high-value production in India signals a future where the country is not only a production hub but also a thriving market for premium technology. As Apple’s influence grows, so too does India’s potential to attract other tech giants, solidifying its place in the international tech ecosystem and ushering in a new era of innovation, job creation, and economic opportunity.
(With inputs from agencies)
