Apple Plans Major Expansion of iPhone Production in India

Apple plans to ramp up its India-based manufacturing output, almost doubling it by 2028, as part of its efforts to fortify the global supply chain and reduce overreliance on China. The Capgemini Research Institute report noted that Apple is on a path to expand its native manufacturing in India to 25% by 2028, up from just 14% in FY24.  To be sure, Apple Inc. isn't the only company that has been cutting back on production in China, and for varied reasons.

The report, entitled The Resurgence of Manufacturing: Reindustrialisation Strategies in Europe and the US, focuses on India, which has emerged as the biggest producer of Apple smartphones outside of China. In FY24, India is estimated to have accounted for 14% of Apple's total iPhone production, with expectations of a considerable uptick in that figure over the next few years.

The Global Shift in Manufacturing

U.S. businesses are looking to set up manufacturing in places that provide better access to components and that are politically stable. The report points to India, Mexico, Vietnam, and Malaysia as good candidates. Why? Geopolitics isn't the only thing driving these companies. Cost is another big factor. And a third factor the report highlights is diversification.

Southeast Asia is seeing investment in reindustrialization, with targets like India and Vietnam, that is better than anywhere else in Asia. This expansion is not limited to Apple and goes beyond the semiconductor supply chain; it encompasses a much more diverse array of key sectors, including electronics manufacturing, energy, metals mining, and industrial production.

Increasing Foreign Investment in India

The Capgemini report states that numerous international companies are looking to boost their investments in India in the coming three years as part of their drive toward reindustrialization.

- 40% of UK companies expect to increase their investment in India.  

- 38% of U.S. and Spanish firms plan to put more resources into Indian manufacturing.  

- 39% of German companies, 40% of Dutch firms, and 33% of French companies also see India as a prime investment spot.

These statistics imply a solid belief in India as a likely candidate to become a global manufacturing powerhouse, driven by government incentives, skilled labor, and a large, growing consumer market.

Industry-Specific Investments

The study emphasizes that different industries are shifting their focus toward India when it comes to investments, with varying levels of dedication. The sectors we looked at invest in India for different reasons. Here are some highlights.

- Aerospace & Defense: 47% of firms expect to boost their spending.

- Electronics: 45% of companies perceive growth prospects.

- Metals & Mining: 49% of firms are contemplating expansion.

- Life Sciences: 41% of firms are concentrating on India.

- Battery Manufacturing & Energy Storage: 39% of firms are planning to invest more.

- Automotive: 33% of companies are planning to up their production.

Other sectors, such as chemicals, consumer product manufacturing, energy, transportation, and telecom, are also ramping up investments, showing that India's rising attraction as a key manufacturing destination is broadening beyond information technology.

The global manufacturing network is proving to be an asset for Apple Inc. as it seeks to engage with Indian manufacturing and rapidly diversify supply chains beyond China.