Industry News | 6/13/2025
Apple Shifts iPhone Production to India, Boosting Exports to US
Apple's strategic shift in manufacturing sees 97% of India-assembled iPhones exported to the US, highlighting India's growing role as a key production hub. This move aligns with Apple's 'China Plus One' strategy, driven by geopolitical tensions and economic incentives.
Apple Shifts iPhone Production to India, Boosting Exports to US
In a significant shift in global supply chains, Apple has dramatically increased its export of iPhones assembled in India to the United States. Between March and May of this year, 97% of iPhones produced by Foxconn in India were shipped to the US, according to recent customs data. This marks a substantial change from previous strategies that saw a more diverse distribution, including European markets.
This shift underscores India's growing importance as a manufacturing hub for Apple, driven by geopolitical tensions, economic incentives, and a strategic move to reduce reliance on China. Known as the 'China Plus One' strategy, this approach aims to diversify Apple's manufacturing base amid ongoing trade frictions between the US and China.
Strategic and Economic Impacts
The decision to move a significant portion of iPhone production to India is influenced by several factors. The US-China trade tensions have introduced tariff risks and operational uncertainties, prompting Apple to seek alternatives. By manufacturing in India, Apple can bypass hefty tariffs on Chinese goods.
In 2024, Foxconn's Indian-made iPhones sent to the US averaged 50.3%, a figure that has now surged to 97%. The value of these exports reached $4.4 billion in the first five months of the current year, surpassing the total for the entire previous year.
Government Incentives and Economic Growth
India's Production-Linked Incentive (PLI) scheme has played a crucial role in this transition. Launched in 2020, the PLI scheme offers financial incentives to boost local production and exports. For electronics, this includes incentives of 4-6% on increased sales, attracting significant investments from Apple's partners.
As a result, Apple's production in India soared to $22 billion in the fiscal year ending in March, a 60% increase from the previous year. This output now accounts for 20% of all iPhones made globally.
Broader Implications
This manufacturing realignment is a major win for India's "Make in India" initiative, transforming the country into a significant exporter of mobile phones. The influx of investment is creating jobs and developing a local supply chain, making electronics a leading export category for India.
For the global supply chain, Apple's move reflects a broader trend of building resilient and geographically distributed production networks. This diversification helps mitigate risks associated with over-concentration in a single country, adapting to shifting geopolitical landscapes.
In conclusion, Apple's increased export of iPhones from India to the US marks a pivotal moment in its global strategy, driven by a need to navigate US-China trade dynamics and capitalize on Indian government incentives. This shift is rapidly positioning India as a primary hub for iPhone production, reshaping the global electronics supply chain and impacting the future of technology manufacturing.