India to manufacture all iPhones for the US market
What's the story
Apple is said to be planning to move all of its iPhone production for the US market to India by the end of 2026.
The ambitious move, according to Financial Times, would require Apple to double its current iPhone manufacturing capacity in India.
The company's supply chain diversification strategy has been slowly but surely expanding over the last few years, and this is a major acceleration.
Market dynamics
US market and trade tensions with China
The US market now constitutes nearly 28% of Apple's worldwide iPhone shipments, which reached 232.1 million units in 2024, as per International Data Corporation.
This change in production comes as trade tensions between the US and China resurface.
The US President Donald Trump recently imposed hefty tariffs on Chinese imports, leading to a decline of around $700 billion in Apple's market value.
Strategic response
Apple's proactive measures against tariffs
Amid the trade tensions, Apple reportedly rushed to ship existing Indian-manufactured iPhones to the US.
CEO Tim Cook has been working hard behind the scenes to shield Apple from Trump's tariffs.
After discussions with senior White House officials, he managed to get iPhones, Macs, Apple Watches, and iPads temporarily exempted from most of Trump's 145% tariffs on Chinese imports.
Production goals
Manufacturing capacity in India and US-China trade relations
Apple has been slowly building manufacturing capacity in India with partners Tata Electronics and Foxconn.
The company's relationship with the Indian government could pay off, considering India is currently negotiating a bilateral trade agreement with the US.
However, despite this assembly shift, Apple still depends on Chinese suppliers for hundreds of iPhone components.
Back in February, Apple pledged a $500 billion investment in the US, but it has not announced any plans to bring iPhone production to American soil.
Information
How Foxconn and Tata Electronics are performing
In March, Foxconn achieved its highest-ever monthly smartphone shipments worth $1.31 billion. The amount was equal to the total exports for January and February combined. Meanwhile, Tata Electronics witnessed a 63% month-on-month growth in iPhone exports, totaling $612 million in March.
Production plans
Apple's production targets and supplier expansion
Apple wants to source over 60 million iPhones sold annually in the US from India by the end of 2026.
Foxconn's new facility in Bengaluru, which is expected to be operational by the end of this month, will likely be instrumental in reaching that goal.
Other Apple suppliers are also scaling up operations at existing sites across India.
Despite the ongoing diversification from China, Apple still relies on nearly 200 suppliers based in China for most iPhone components.
Information
Government incentives and Apple's local supply chain
India's emergence as a manufacturing hub is backed by government subsidies in line with Prime Minister Narendra Modi's 'Make in India' initiative. New financial incentives worth $2.7 billion are aimed at boosting electronics and semiconductor manufacturing, which could further bolster Apple's local supply chain.