Apple is accelerating its plans to shift a significant portion of its iPhone production to India by the end of 2026, aiming to have the majority of iPhones sold in the United States manufactured within the country. This move is driven by the potential for higher tariffs in China, which is currently the primary manufacturing base for the tech giant. According to sources familiar with the matter, Apple is in urgent discussions with contract manufacturers Foxconn and Tata to expedite this transition.
Presently, Apple sells over 60 million iPhones annually in the US, with approximately 80% of these iPhones being made in China. However, Prime Minister Narendra Modi's recent push to make India a global smartphone manufacturing hub has added momentum to Apple's plan. Still, India's higher duties on mobile phone parts—compared to other countries, make it a more expensive manufacturing destination. As a result, the cost of manufacturing iPhones in India is 5-8% higher than in China, with the gap increasing to 10% in some cases, according to the source.
To mitigate the impact of US tariffs imposed under former President Donald Trump's administration, Apple has already ramped up its production in India. In March, Apple exported 600 tons of iPhones, worth $2 billion, to the US, a record for both Tata and Foxconn. Foxconn alone accounted for smartphones worth $1.3 billion in those shipments.
In April, the US government imposed a 26% tariff on Indian imports, which is much lower than the more than 100% tariff on Chinese imports at the time. However, the US has since paused most of these duties for three months, excluding those for China. This pause provides a window for Apple to adjust its supply chain and avoid the higher Chinese tariffs.
Apple's decision to diversify its manufacturing base and position India as a critical manufacturing hub is part of a broader strategy to reduce its dependence on China. Foxconn and Tata, which are the two key suppliers for Apple in India, currently operate three factories, with two more under construction. This expansion reflects both Apple's commitment to India and the country's growing role in the global supply chain for high-tech products.
Apple’s shift away from China comes amid ongoing trade tensions between the US and China, which have created uncertainty and prompted companies to seek alternative manufacturing locations. As Apple moves forward with its plans, India is poised to play a pivotal role in the company’s supply chain, marking a significant shift in global manufacturing dynamics.
