Monday, May 5, 2025

Apple is Planning to Increase iPhone Manufacturing in India

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Apple is planning to increase iPhone manufacturing worth Rs 3.36 lakh crore in India by the end of the financial year 2026. This is part of Apple’s big decision to move some of its global supply chain out of China. Rising trade tensions, geopolitical issues, and tariffs between countries have pushed Apple to look for new production hubs. India has quickly become one of the key places where Apple is now investing in large-scale manufacturing.

India to Become Main iPhone Source for US Market

According to estimates from the industry, Apple wants to produce about $40 billion worth of iPhones in India by FY26. This will help Apple meet up to 80% of the iPhone demand in the United States. It will also fully cover the needs of the growing Indian smartphone market. During Apple’s Q2 2025 earnings call, CEO Tim Cook shared that most iPhones sold in the US between April and June would be made in India.

Tariffs Prompt Apple Shift Away from China

This shift is linked to new US government tariffs that charge extra taxes depending on where a product is made. To avoid high costs, Apple is moving its iPhone production to India. However, Apple will still make many of its products for markets outside the US in China. Cook explained that while China remains important, countries like Vietnam and India are now rising as important manufacturing hubs.

Alongside India, Vietnam will now produce almost all Apple Watches, iPads, Macs, and AirPods that are sold in the United States. Apple expects US tariffs to impact them by around $900 million this quarter. Even though the long-term impact is not fully known, Apple is preparing for future policy changes by expanding in multiple countries.

Government Support and PLI Scheme

Apple’s growth in India has been supported by the Indian government’s Production-Linked Incentive (PLI) scheme. This program rewards companies that make electronics in India. It has helped India’s electronics exports reach new highs. In FY25 so far, smartphones became the number one export from India, crossing Rs 2 lakh crore in value. Apple played a major role in this by exporting iPhones, which made up nearly 70% of all smartphone exports.

Apple Sales in India Alongside Production

Apple is also focusing on selling more products in India. The company recently broke its quarterly sales record in the country. After opening two retail stores, Apple plans to open more stores this year to grow its local presence. With strong performance in both products and services, Apple’s deeper investment in India shows it sees the country as both a key market and manufacturing base for the future.

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