Apple Boosts iPhone Production in India, marking a major shift in its manufacturing strategy. As tensions rise in China, Apple is increasing its production capacity in India to reduce reliance on its Asian neighbor. This move not only strengthens India’s role in global tech but also reflects Apple’s growing commitment to diversifying its supply chain.
New Delhi: Apple is planning to ramp up iPhone production in India sharply 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.
iPhones made in India? While it may sound strange, it is to happen in the near future. iPhones will be made in India in the near future. Apple is looking to shift more of its iPhone production out of China and into India in a change of how and where one of the world’s most popular smartphones is built. Apple’s iPhone manufacturing unit has always been in China. But why this shift? This is a major change in Apple’s global manufacturing strategy.
Apple is expected to transfer assembly of all iPhones sold in the United States from China to India as soon as next year, according to the Financial Times. While this is Apple’s largest manufacturing shift in decades, this shift could create thousands of new jobs and opportunities at a time when India’s electronics sector is taking off.
Why is Apple moving iPhone production to India?
Apple has been heavily dependent on China for years, with 90 percent of iPhones assembled there and 40 percent of suppliers in the country. Apple has relied on China to become as successful as it has, but ever-rising trade tensions between China and the US, especially from President Donald Trump’s recently enacted tariffs, have made manufacturing in China more expensive and more risky for Apple. For example, some Chinese-manufactured goods are now subject to tariffs as high as 54 percent, making it more difficult for Apple to keep costs down.
But India presents a more stable trade environment and is in talks with the US to strike a special trade deal that could make Indian made iPhones even more attractive for export. Another reason why Apple could get into a production spree in India is that India has a paused reciprocal tariff of 26 per cent, whereas duties on Chinese goods are much higher.
What does this mean for India?
Apple’s decision is a big win for India’s goal to become a global manufacturing hub.
- Apple’s suppliers and partners will create new jobs for assembly lines, logistics, quality control, and management.
- Production Linked Incentive (PLI) scheme of the government and 2.7 billion dollars in incentives are luring more global tech companies to set up shop in India.
- India’s growth in related sectors such as electronics components, packaging and transport will increase.
- In FY25, India exported iPhones worth 17.4 billion dollars, and the Indian made iPhones are already finding their way into global markets.
Challenges that India can face
While this is promising, it is not without challenge. Apple’s supply chain in China is well established, and it will take time and care to move such a large operation. It will take several years for India to be on a par with China in terms of scale and efficiency, but the momentum is very clear.
Apple and its suppliers plan to assemble 32% of global iPhones in India by 2026-27, with a production value of 34 billion dollars. Tata Electronics is also growing, having recently taken a majority stake in Pegatron’s plant in Tamil Nadu, which will add to capacity.
“Private businesses should make their own business decisions based on their own technological progress,” Kuo said, following the announcement of plans to build a 2-nanometer chipset fabrication plant in the US, representing an investment of up to $30 billion in the US market by TSMC.
A new era for Indian manufacturing
Apple’s move to shift iPhone production in the US to India is a sign of India’s increasing role in the global technology supply chain. This means more job opportunities, better training, and an opportunity to be part of the world’s most advanced manufacturing processes for Indian workers, engineers, and students. India’s role in the global tech industry will become stronger than ever as Apple’s factories grow.
Manufacturing is emerging as an integral pillar in the country’s economic growth, thanks to the performance of key sectors like automotive, engineering, chemicals, pharmaceuticals, and consumer durables. The Indian manufacturing industry generated 16-17% of India’s GDP pre-pandemic and is projected to be one of the fastest growing sectors.
The machine tool industry was literally the nuts and bolts of the manufacturing industry in India. Today, technology has stimulated innovation with digital transformation a key aspect in gaining an edge in this highly competitive market.
Technology has today encouraged creativity, with digital transformation being a critical element in gaining an advantage in this increasingly competitive industry. The Indian manufacturing sector is steadily moving toward more automated and process-driven manufacturing, which is projected to improve efficiency and enhance productivity.
India’s manufacturing sector reached a 16-year high in March, with the HSBC Manufacturing Purchasing Managers’ Index (PMI) rising to 59.1, driven by strong increases in output, new orders, and job creation across various goods sectors.
India has the potential to become a global manufacturing hub for wind power components. India is well-positioned to cater to 10% of the global wind energy demand by 2030, leveraging its manufacturing capacity, technology, and global reputation.
With 17% of the nation’s GDP and over 27.3 million workers, the manufacturing sector plays a significant role in the Indian economy. Through the implementation of different programmes and policies, the Indian government hopes to have 25% of the economy’s output come from manufacturing by 2025.
India now has the physical and digital infrastructure to raise the share of the manufacturing sector in the economy and make a realistic bid to be an important player in global supply chains.
A globally competitive manufacturing sector is India’s greatest potential to drive economic growth and job creation this decade. Due to factors like power growth, long-term employment prospects, and skill routes for millions of people, India has a significant potential to engage in international markets. Several factors contribute to their potential. First off, these value chains are well positioned to benefit from India’s advantages in terms of raw materials, industrial expertise, and entrepreneurship.
Second, they can take advantage of four market opportunities: expanding exports, localising imports, internal demand, and contract manufacturing. With digital transformation being a crucial component in achieving an advantage in this fiercely competitive industry, technology has today sparked creativity. Manufacturing sector in India is gradually shifting to a more automated and process driven manufacturing which is expected to increase the efficiency and boost production of the manufacturing industry.
The Government of India has taken several initiatives to promote a healthy environment for the growth of manufacturing sector in the country. Some of the notable initiatives and developments are:
- In the Union Budget 2025-26:
- The Union Budget 2025-26 has been well received by the renewable energy industry, with experts praising its emphasis on clean power, domestic manufacturing, and sustainability. Key initiatives include the Rs. 20,000 crore (US$ 2.30 billion) allocation for nuclear energy, legislative reforms for energy security, and the Rs. 20,000 crore (US$ 2.30 billion) commitment to the PM Surya Ghar Muft Bijli Yojana for rooftop solar expansion.
- On February 7, 2025, the Union Cabinet has approved the restructuring of the Skill India Programme with an Rs. 8,800 crore (US$ 1.1 billion) outlay, extending it till 2026 to integrate demand-driven, tech-enabled, industry-aligned training nationwide.
- The Union Cabinet has announced the merger of Pradhan Mantri Kaushal Vikas Yojana 4.0, Pradhan Mantri National Apprenticeship Promotion Scheme, and Jan Shikshan Sansthan Scheme under the Skill India Programme.
- On the 10th anniversary of the ‘Make in India’ initiative, Union Commerce and Industry Minister Mr. Piyush Goyal reported significant achievements, including an 85% reduction in mobile imports and a 200% increase in manufacturing jobs from 2022 to 2024. He emphasized that 99% of mobile phones in India are now produced domestically, reflecting the initiative’s success in transforming India’s manufacturing landscape and attracting substantial Foreign Direct Investment (FDI). He highlighted ongoing efforts to improve the ease of doing business and support the startup ecosystem, aiming to position India as a global manufacturing hub and a developed nation by 2047.
- Union Minister of Education and Skill Development & Entrepreneurship, Mr. Dharmendra Pradhan inaugurates Rashtriya Udyamita Vikas Pariyojana under Skill India Mission, empowering PM SVANidhi beneficiaries with comprehensive 22-week entrepreneurship training, including theoretical and practical components, in collaboration with Flipkart and focusing on 40% women participation.
- Semiconductor associations IESA and SEMI signed a Memorandum of Understanding (MoU) in Bengaluru to establish India as a global manufacturing hub, focusing on talent development, policies, design, skilling, research, academia, and supply chains, leveraging SEMI’s international network and IESA’s expertise.
- Under the Skill India mission, Pradhan Mantri Kaushal Vikas Yojana (PMKVY) has trained over 1.40 crore candidates since 2015, as per Skill India Digital data until December 13, 2023. Notably, in the Short-term Training (STT) program, 42% of certified candidates found placement opportunities, with 24.39 lakh candidates successfully placed out of 57.42 lakh certified.
- Ministry of Defence has set a target of achieving a turnover of Rs. 217.18 crore (US$ 25 million) in aerospace and defence Manufacturing by 2025, which includes Rs. 43,435 crore (US$ 5 billion) exports.
- Till October 2022, a total of 595 Industrial Licences have been issued to 366 companies operating in Defence Sector.
- By 2030, the Indian government expects the electronics manufacturing sector to be worth Rs. 26,06,100 crore (US$ 300 billion).
- Initiatives like Make in India, Digital India and Startup India have given the much-needed thrust to the Electronics System Design and Manufacturing (ESDM) sector in India.
- The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) has been notified with an aim to strengthen the value chain for the manufacturing of electronic products in India.
- The PLI for semiconductor manufacturing is set at Rs. 760 billion (US$ 9.71 billion), with the goal of making India one of the world’s major producers of this crucial component.
- The government approved a PLI scheme for 16 plants for key starting materials (KSMs)/drug intermediates and active pharmaceutical ingredients (APIs). The establishment of these 16 plants would result in a total investment of Rs. 348.70 crore (US$ 47.01 million) and generation of ~3,042 jobs. The commercial development of these plants is expected to begin by April 2023.
- In September 2022, the National Logistics Policy was launched by Prime Minister Mr. Narendra Modi which ensures quick last mile delivery, ends transport-related challenges.
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