Apple’s Growing Presence in India

Apple Inc. is making a major move to India, now manufacturing iPhones worth $22 billion in the country. This strategic shift comes as Apple reduces its reliance on China, marking a significant milestone in its global supply chain realignment. According to a Bloomberg report, nearly 20% of Apple’s global iPhone output now comes from India—a notable shift driven by geopolitical tensions, the pandemic, and the company’s efforts to diversify production.

The Impact of Geopolitical Tensions and Tariffs

Apple’s decision was accelerated by the severe COVID-19 lockdowns in China, which disrupted operations at the company’s largest manufacturing plant. The disruptions pushed Apple to rethink its production strategy, with India emerging as a key alternative. In addition, the U.S. government’s implementation of “reciprocal” tariffs under President Trump pushed Apple to focus more on India-based production for the American market. As a result, shipments of India-made iPhones to the U.S. surged, as these devices were exempt from the tariffs that applied to those assembled in China.

India’s Expanding Role in Apple’s Supply Chain

India’s contribution to Apple’s supply chain goes beyond assembly. In the fiscal year ending March 2025, India is expected to export about $17.4 billion worth of iPhones, driven by Apple’s increased focus on the region. Foxconn, a major Apple supplier, plays a significant role in the assembly process at its facility in southern India, while Tata Group’s electronics division is also becoming a key player in production. This shift is part of Apple’s broader effort to diversify its manufacturing footprint outside of China, which could take up to eight years to reduce by just 10%, according to Bloomberg Intelligence.

Supportive Policies and Competitive Advantages

India’s rise as a manufacturing hub is supported by several government initiatives. The Indian government has rolled out a $2.7 billion production-linked incentive (PLI) scheme to boost electronics manufacturing, further strengthening the country’s position. Moreover, India benefits from a zero-tariff policy on smartphone, laptop, and tablet exports to the U.S., giving it a competitive edge over China and other markets.

Both India and Vietnam currently enjoy a 20% pricing advantage in the U.S. over Chinese-made smartphones, thanks to the absence of tariffs. While Vietnam has been a strong contender, Apple’s growing scale in India is putting it on track to become a dominant player in the sector.

Apple’s Expanding Market Share in India

Apple’s strategy in India extends beyond just manufacturing. The company is also making significant strides in the Indian consumer market, where it now holds nearly 8% of the smartphone market share. With sales approaching $8 billion in FY24, Apple’s growing presence in the country signals its long-term commitment to the region and its vision for India as a key player in the global tech ecosystem.