Image Source: Financial Express
Despite significant growth in iPhone production in India, the claim that all U.S. Apple iPhones will henceforth be “Made in India” is not fully accurate yet. Apple has expanded manufacturing in India substantially but continues to rely on China and other locations for a large share of its production, including most iPads, Macs, Apple Watches, and AirPods sold in the U.S. This newsletter provides a detailed explanation of the current manufacturing landscape, strategic motivations, challenges, and future prospects for Apple’s production footprint centered on India.
Key Highlights: Rapid Growth of iPhone Manufacturing in India
Apple’s iPhone production in India has surged dramatically in recent years, reaching about 17% of global iPhone production by early 2025 and rising year-over-year by over 50% to nearly 24 million units produced in the first half of 2025 alone.
In fiscal year ending March 2025, Apple assembled over 40 million iPhones in India, accounting for nearly 14-16% of its worldwide iPhone output and generating around $22 billion in revenue from Indian production.
Major contract manufacturers like Foxconn, Pegatron, and Tata Group drive this production, with Foxconn’s Tamil Nadu plant assembling high-end models including iPhone 16 Pro and anticipated trial production of iPhone 17 underway.
India aims to nearly double its iPhone production capacity to 60 million units annually by 2026, potentially supplying the majority of the U.S. iPhone demand, which stands at about 72 million units per year.
Indian-made iPhones already constitute a substantial and growing share of exports, with the U.S. increasingly becoming the primary destination for these exports—accounting for about 78% of Indian iPhone exports by mid-2025, up from 53% in 2024.
Why iPhones “Made in India” Do Not Completely Replace China Yet
Despite accelerated growth, over 90% of Apple’s global iPhone production remains in China due to established supply chains, scale, advanced manufacturing ecosystems, and cost advantages.
Apple continues to manufacture other core products such as iPads, Macs, Apple Watches, and AirPods primarily in Vietnam and China, signaling that India is not yet a comprehensive alternative for all product lines.
The transition reflects strategic diversification undertaken well before the recent U.S.-China trade tariff disputes, aiming to mitigate geopolitical risks and tariffs imposed especially during Donald Trump’s presidency.
India’s manufacturing costs are generally higher by 5-10% compared to China, owing to more expensive components and relatively less developed production infrastructure, presenting challenges to full-scale relocation.
The Production Linked Incentive (PLI) scheme and government support help offset some cost disadvantages and promote value addition locally, but significant investments in infrastructure, skilled labor, and supplier base expansion remain essential.
Strategic Motivations and Challenges
The shift toward India is partly a safeguard against unpredictable tariffs and geopolitical tensions; Apple’s CEO Tim Cook affirmed India’s role as a vital assembly base for iPhones destined for the U.S. and global markets.
India’s government initiatives to create a favorable electronics manufacturing ecosystem and build critical vendor networks have accelerated Apple’s expansion plans, supporting local ecosystem development alongside large-scale assembly.
Large investments like Foxconn’s $1.5 billion expansion plans and potential new supplier entries illustrate India’s growing importance but also highlight competition with Southeast Asian countries such as Vietnam.
Challenges include ensuring competitiveness with China’s entrenched supply chain efficiencies, addressing bureaucratic hurdles, improving logistics, and fostering a skilled workforce to match global standards.
Future Prospects: India’s Growing Role in Global Apple Supply Chain
Industry analysts forecast India’s share in global iPhone production could reach 25% by 2027, with some optimistic projections suggesting up to 50% by the end of this decade if infrastructure and ecosystem development proceeds rapidly.
Apple is pioneering same-day manufacturing for newly launched models like iPhone 17 simultaneously in China and India, marking a milestone in India’s manufacturing maturity.
The expansion aligns with India’s ambition to be a major global electronics manufacturing hub, leveraging incentives and market access to attract multinational corporations beyond Apple.
With continuous ramp-up and supply chain localization, India is poised to become the leading assembly location for U.S. iPhones in the near future. However, a complete manufacturing shift away from China remains a longer-term goal requiring further investment and policy support.
Conclusion
While headlines may suggest “Made in India” iPhones will entirely replace those made in China for the U.S. market, the reality is a nuanced and gradual transition. Apple is rapidly scaling India’s production capabilities, with a significant share of iPhones for global markets—including the U.S.—being assembled in India. Nonetheless, China remains central for Apple’s manufacturing of many models and product categories. The move is a major strategic diversification shaped by tariff environments, geopolitical considerations, and growing confidence in India’s manufacturing potential. With further infrastructure development and ecosystem maturation, India’s role in Apple’s global supply chain will only expand, but complete product manufacturing migration remains a multi-year journey.
Sources: DW, AppleInsider, Times of India
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