News Desk
NEW DELHI — Amid escalating global trade tensions and a volatile tariff landscape, India is emerging as a linchpin in Apple Inc.’s strategy to diversify its manufacturing base, with the country poised to become the primary production hub for iPhones sold in the United States. The shift, announced by Apple’s chief executive, Tim Cook, during a recent earnings call, marks a transformative moment for India’s technology sector and underscores its growing stature in the global economy.
Apple’s pivot to India is driven by a combination of geopolitical pressures and strategic foresight. The company expects U.S. tariffs on Chinese goods to cost it $900 million in the current quarter, even as exemptions for completed smartphones provide temporary relief. To mitigate these risks, Apple is accelerating its production in India, where it already assembles a significant portion of its iPhones through partnerships with contract manufacturers like Foxconn, Pegatron, and Wistron. According to research firm Canalys, India’s share of iPhone production for the U.S. market surged toward the end of the last quarter, a trend Cook confirmed would continue. “A majority of iPhones sold in the U.S. will have India as their country of origin,” he told analysts, signaling a seismic shift from China, which has long dominated Apple’s supply chain.
India’s rise as a manufacturing hub is no accident. The Indian government’s Production-Linked Incentive (PLI) scheme, launched in 2020, has been a game-changer, offering financial incentives to companies that expand local production. Apple’s manufacturing partners have invested billions in Indian facilities, particularly in southern states like Tamil Nadu and Karnataka, creating tens of thousands of jobs and fostering a burgeoning ecosystem of component suppliers. Foxconn’s plant near Chennai, for instance, employs over 40,000 workers and produces millions of iPhones annually, while Pegatron’s nearby facility is scaling up to meet growing demand. These efforts align with Prime Minister Narendra Modi’s “Make in India” initiative, which aims to position the country as a global manufacturing powerhouse.
The economic impact is already tangible. A report by the India Cellular and Electronics Association estimates that Apple’s operations have created over 150,000 direct and indirect jobs in India since it began assembling iPhones there in 2017. Beyond job creation, Apple’s investments are spurring skill development and technology transfer, as local workers gain expertise in advanced manufacturing processes. “This is a watershed moment for India’s tech industry,” said Le Xuan Chiew, a research manager at Canalys. “Apple’s commitment not only elevates India’s role in global supply chains but also catalyzes long-term economic growth.”
Apple’s plans extend beyond iPhones. Cook hinted at expanding production in India for other products, including iPads, MacBooks, Apple Watches, and AirPods, most of which are currently assembled in Vietnam for the U.S. market. This diversification reflects lessons learned from over-reliance on China, where disruptions from trade disputes, Covid-19 lockdowns, and geopolitical tensions exposed vulnerabilities in Apple’s supply chain. “What we learned some time ago was that having everything in one location had too much risk,” Cook said. “We have, over time, opened up new sources of supply, and you could see that continuing in the future.”
India’s appeal lies not only in its cost advantages but also in its vast domestic market, which offers Apple a buffer against external shocks. With a population of 1.4 billion and a growing middle class, India is Apple’s fastest-growing market, though it accounts for just 3% of global iPhone sales. The company has expanded its retail presence, opening flagship stores in New Delhi and Mumbai in 2023, and is tailoring products to local preferences, such as offering financing plans to make premium devices more accessible.
Yet, challenges remain. India’s infrastructure, while improving, lags behind China’s in areas like transportation and power reliability, posing logistical hurdles for just-in-time manufacturing. The country also faces a shortage of skilled engineers and technicians needed for high-end component production, forcing Apple to rely on imported parts for now. “The more components are crossing borders, the more cost flows through to the device,” said Rob Enderle, an independent tech analyst, noting that tariffs on components could offset some of India’s cost advantages.
Moreover, scaling up production to meet U.S. demand will test India’s capacity constraints. Apple’s China-based facilities still produce the majority of its global output, and transitioning significant volumes to India will require years of investment and coordination. “Apple’s plan raises pressing questions about execution timeline, capacity limitations, and potentially unavoidable cost increases,” said Jacob Bourne, an analyst at Emarketer. These costs could either squeeze Apple’s margins or be passed on to consumers, particularly if tariffs escalate.
Despite these hurdles, India’s trajectory is clear. The country’s share of global iPhone production has grown from negligible levels five years ago to an estimated 14% in 2024, according to Counterpoint Research, and analysts predict it could reach 25% by 2027. This shift is part of a broader trend, with companies like Samsung, Google, and Tesla also expanding their manufacturing footprints in India to hedge against U.S.-China trade frictions.
For India, Apple’s embrace is a vote of confidence in its economic potential. The government is doubling down on incentives, announcing plans in 2024 to extend the PLI scheme to component makers and invest $20 billion in semiconductor development. These initiatives aim to reduce India’s reliance on imported parts and position it as a self-sufficient tech hub.
As Apple navigates an “expensive mess” of tariffs, as Enderle put it, India’s role as a counterbalance to China will only grow. For the global tech industry, this shift signals a reconfiguration of supply chains, with India at the forefront. For the nation itself, it heralds a new era of economic opportunity, technological advancement, and global relevance.
