Apple’s supply shift to India speeds up to 44%, surpassing China for the first time
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Apple’s iPhone supply chain is undergoing a profound transformation, and India is now at the center of it. In the second quarter of 2025, smartphones assembled in India accounted for 44 percent of all US smartphone imports, a sharp rise from just 13 percent the year before. Meanwhile, China’s share fell to 25 percent, down from 61 percent. These numbers reflect a structural reorganization of how and where Apple builds its flagship product.
This shift is most visible in the volume of devices moving from India to the United States. Between January and May 2025, iPhone exports from India reached $9.35 billion, more than triple the amount recorded in the same period of 2024. Nearly 97 percent of Apple’s Indian exports in the March–May quarter went directly to the US market. In effect, India is no longer a contingency site, it is quickly becoming Apple’s key production base for the world’s largest smartphone economy.
This transformation is driven by more than logistics. It signals a reconfiguration of global tech manufacturing, shaped by cost structures, geopolitical considerations, and risk diversification. For Apple, long dependent on China as its core manufacturing hub, India offers strategic flexibility and supply chain resilience.
Record-setting iPhone exports are putting India in a lead position
The numbers tell a decisive story. In the first half of 2025, Apple assembled 23.9 million iPhones in India, a 53 percent increase over the same period in 2024. Nearly 78 percent were exported, primarily to the United States. This expansion marks Apple’s fastest ramp-up of offshore production since launching iPhone assembly in India in 2017.
India’s iPhone exports reached ₹1.5 lakh crore, or about $17.4 billion, during fiscal year 2025. That’s a 76 percent rise from the previous year. Industry projections suggest this number will continue to rise as new production facilities come online.
While US smartphone demand remains stable, Apple’s pivot to India is about future-proofing operations. The move enhances Apple’s flexibility as it navigates geopolitical shifts and prepares for new global sourcing strategies.
Foxconn and Tata’s new facilities are powering India’s manufacturing boom
Apple’s rapid growth in India has been enabled by its key manufacturing partners. Foxconn, its largest assembler, has committed $1.5 billion to build a display module facility near Chennai, expected to create approximately 14,000 jobs. Tata Electronics, another critical supplier, has launched a new plant in Tamil Nadu. Pegatron is also expanding operations in the region.
A massive new $2.6 billion Foxconn plant in Bengaluru is set to be operational by 2026. These developments mark a shift from simple assembly to full-fledged component production and localized supply chain ecosystems. As Apple strengthens its partnerships, India’s capabilities are scaling to meet both global volume and quality standards.
Tariffs and geopolitics are reinforcing Apple’s China Plus One strategy
Apple’s manufacturing transition is deeply tied to political and economic realities. Since 2018, rising US-China tensions have pushed many US firms to diversify their operations. Apple’s “China Plus One” strategy aims to balance its reliance on China with investments in alternative countries.
Indian-made iPhones benefit from lower US import duties. While iPhones from China can be subject to tariffs of up to 30 percent, India faces just 10 percent. This gives Indian production a clear cost advantage.
Former President Trump recently threatened to impose a 25 percent tariff on Indian-made iPhones. However, analysts expect limited follow-through, given the scale of Apple’s investment and the lack of US manufacturing alternatives. The political risks, while present, are not expected to halt Apple’s long-term strategy.
Government incentives and local policies are accelerating this transition
The Indian government’s Production-Linked Incentive scheme has been critical in supporting Apple’s move. Between April and October 2024, electronics production worth $10 billion qualified under the scheme, with $7 billion exported. The program also led to 175,000 new jobs, nearly three-quarters of which were filled by women.
Local governments have complemented these efforts. Tamil Nadu and Karnataka have provided land, power, and logistical support, enabling quicker project execution. Apple’s suppliers are responding by embedding deeper into local ecosystems, improving production timelines and cutting logistics costs.
This is not a temporary reallocation of production. India’s share of global iPhone manufacturing has risen from less than 1 percent in 2017 to 17 percent in 2025. The number is projected to reach 25 percent by the end of the year and possibly 35 percent by 2026.
These trends indicate that India is becoming a pillar of Apple’s global production strategy. With deepening supplier integration, strong policy support, and expanding local talent, India is poised to be more than a contingency. It is emerging as a primary production base for one of the world’s most valuable technology companies.
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