Apple India increases iPhone production to $22 billion amid shift from China

Apple Inc. is significantly boosting its manufacturing presence in India, now producing $22 billion worth of iPhones, marking a shift away from its traditional manufacturing base in China. The company's ramped-up production means that 20% of its global iPhone output now comes from India, Bloomberg reported on Saturday. This move was initiated following the disruptions caused by COVID-19 lockdowns in China, which impacted production at Apple's largest plant. The majority of these India-made iPhones are assembled at Foxconn Technology Group’s facility in the southern part of the country, with Tata Group’s electronics manufacturing arm also playing a crucial role. 

In terms of exports, Apple's operations in India have been notably successful. The company exported iPhones worth 1.5 trillion rupees, which equates to approximately $17.4 billion, during the fiscal year through March 2025. This export surge was influenced by President Donald Trump's decision to introduce "reciprocal" tariffs, prompting Apple to prioritise its India supply chain for the US market. Consequently, shipments of iPhones from India to the US have increased significantly following this announcement, as Bloomberg News previously reported. 

The shift towards Indian production forms part of Apple's long-term strategy to diversify its supply chain. While the transition away from China is gradual, it's fuelled by state-backed incentives in India, aimed at establishing the country as a global manufacturing hub. The Indian government is keen to boost electronics component production, offering $2.7 billion in incentives to further develop the sector. Despite these efforts, Bloomberg Intelligence suggests it might take up to eight years for Apple to relocate just 10% of its production capacity from China.

Another important development in this context is the exemption of iPhones manufactured in India from US tariffs. Following a recent decision, certain electronics, including iPhones, are exempt from the reciprocal tariffs, which benefits Apple significantly as it continues to shift its production from China to India. However, other tariffs on goods from China remain in place, indicating that a complete transition away from the country is a complex and lengthy process.

India has the advantage of zero tariffs on all smartphones, including iPhones, laptops, and tablets exported to the U.S. Vietnam also benefits from no tariffs on Samsung smartphones and other major electronics shipped to American consumers. According to analysis from the India Cellular and Electronics Association (ICEA), this gives both countries a 20% pricing edge over Chinese-made products in the U.S. market. ICEA represents key players such as Apple, Foxconn, Xiaomi, Dixon, and Lava.

Apple's strategic pivot to India is supported by the company's growing market presence in the country. The tech giant holds nearly an 8% market share in the Indian smartphone sector, with sales reaching almost $8 billion in fiscal 2024.