New Delhi: Apple is planning to sharply ramp up iPhone production in India as part of its strategy to accelerate a manufacturing shift from China and shield itself from business uncertainties caused by the ongoing Sino-US trade war.
The Cupertino, California-based company currently makes 40-43 million iPhones in India annually, nearly 80% of which are exported, according to industry estimates. This could surge to 70-80 million by 2026-end, with India becoming the primary supplier of iPhones to the US.
Industry executives said the potential shift will mean India could produce nearly 40% of all iPhone sales globally in the coming 18 months, up from the current 18-20%.
Officials told ET the government will engage with Apple and its suppliers to support the shift as it will be a big boost to India's electronics manufacturing ecosystem.
"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.
He added if Apple plans to double iPhone production in India, it will need to scale it up to 70-80 million units per year, which will be a huge shot in the arm for India's growing electronics manufacturing ecosystem.
Apple did not respond to a query from ET.
The company manufactures iPhones in India through Foxconn and Tata Electronics with the latter taking over Wistron and Pegatron's plants in the country.
Experts, however, pointed out that much of the shift in iPhone manufacturing would hinge on India's position in the new geopolitical order and the terms of the proposed bilateral trade deal with the US. In case, the Trump administration goes soft on China, the shift to India will slow down.
An industry executive said any shift of global value chains (GVCs) would also hinge on whether the Indian government can make deep reforms to address continued cost inefficiencies and policy uncertainties due to taxes and tariffs to ensure that the extra production does not move from China to other countries like Vietnam.
As per India Cellular and Electronics Association (ICEA), which counts Apple and other electronics majors as its members, the cost disadvantage to India versus Vietnam and China is between 7% and 7.5% and that further rationalisation, especially of the key sub-assemblies and components, would help Indian competitiveness.
A Niti Aayog report on electronics GVCs points to the need for lowering tariffs on components to match China and Vietnam as it places Indian exports at a disadvantage. The report also said India needs to rationalise its direct and indirect tax structures to offer the same regime as offered by rival countries.
Apple, which tapped India as its second iPhone manufacturing base globally, is fast expanding capacity in the South Asian country-also the world's second largest smartphone market.
Apple's vendors exported iPhones worth nearly '1.5 lakh crore in FY25, up from '85,000 crore in FY24.
Even though India has emerged in a better position than rivals China and Vietnam in Trump's new tariff regime, New Delhi has to play its cards intelligently and secure a favourable deal with the US for the long term, outflanking its two manufacturing rivals, said experts.
The Cupertino, California-based company currently makes 40-43 million iPhones in India annually, nearly 80% of which are exported, according to industry estimates. This could surge to 70-80 million by 2026-end, with India becoming the primary supplier of iPhones to the US.
Industry executives said the potential shift will mean India could produce nearly 40% of all iPhone sales globally in the coming 18 months, up from the current 18-20%.
Officials told ET the government will engage with Apple and its suppliers to support the shift as it will be a big boost to India's electronics manufacturing ecosystem.
"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.
He added if Apple plans to double iPhone production in India, it will need to scale it up to 70-80 million units per year, which will be a huge shot in the arm for India's growing electronics manufacturing ecosystem.
Apple did not respond to a query from ET.
The company manufactures iPhones in India through Foxconn and Tata Electronics with the latter taking over Wistron and Pegatron's plants in the country.
Experts, however, pointed out that much of the shift in iPhone manufacturing would hinge on India's position in the new geopolitical order and the terms of the proposed bilateral trade deal with the US. In case, the Trump administration goes soft on China, the shift to India will slow down.
An industry executive said any shift of global value chains (GVCs) would also hinge on whether the Indian government can make deep reforms to address continued cost inefficiencies and policy uncertainties due to taxes and tariffs to ensure that the extra production does not move from China to other countries like Vietnam.
As per India Cellular and Electronics Association (ICEA), which counts Apple and other electronics majors as its members, the cost disadvantage to India versus Vietnam and China is between 7% and 7.5% and that further rationalisation, especially of the key sub-assemblies and components, would help Indian competitiveness.
A Niti Aayog report on electronics GVCs points to the need for lowering tariffs on components to match China and Vietnam as it places Indian exports at a disadvantage. The report also said India needs to rationalise its direct and indirect tax structures to offer the same regime as offered by rival countries.
Apple, which tapped India as its second iPhone manufacturing base globally, is fast expanding capacity in the South Asian country-also the world's second largest smartphone market.
Apple's vendors exported iPhones worth nearly '1.5 lakh crore in FY25, up from '85,000 crore in FY24.
Even though India has emerged in a better position than rivals China and Vietnam in Trump's new tariff regime, New Delhi has to play its cards intelligently and secure a favourable deal with the US for the long term, outflanking its two manufacturing rivals, said experts.
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