By FY27, Apple Aims to Produce 32% of iPhones and 26% of Value in India

By FY27, Apple Aims to Produce 32% of iPhones and 26% of Value in India
Apple Targets 32% iPhone Production in India by FY27

By 2026–2027, a year after the end of the five-year production-linked incentive (PLI) programme for handheld devices, Apple Inc. and its suppliers hope to assemble 32% of the iPhone's global production volume and 26% of its value in India.

If global iPhone sales stay at 2023-24 (FY24) levels, this may amount to a production value of more than $34 billion. According to media reports, the figures are based on conversations on product assembly in India between Apple Inc. and its suppliers as well as the federal and state governments. 

India to Produce 17-18% World’s iPhone

Apple's vendors project a freight-on-board (FOB) production value of $9 billion for the first half of 2024–2025 (FY25). According to projections, India would produce 17–18% of the world's iPhones by the end of the fiscal year and 14% of their total worth.

Only 12–14% of the world's iPhone production volume moved to India in FY24, although the value accounted for more than 10%. The corporation is anticipated to conclude FY25 with a production value of $18 billion (market value around $27 billion), according to vendor planning.

The Marketing Dynamics of iPhone

Sales, distribution costs, and dealer margins make up the market value of iPhones, whereas FOB denotes the value at the time of shipment. India's iPhone production was valued at $14 billion in FY24. Given that iPhones accounted for 51% of Apple Inc.'s $391 billion global revenue in the fiscal year that ended on September 30, 2024, the country stands to gain greatly from the move of iPhone production from China.

With $201 billion in global sales, the iPhone is 21% more than the Tata Group's $165 billion overall revenue and 67% higher than Reliance Industries' $119 billion revenue for FY24. Worldwide, Apple's iPhone sales are on par with Microsoft's ($211 billion) and surpass those of several companies, including Chevron ($200 billion), Honda Motor ($141 billion), Ford Motor ($176 billion), and Nestlé ($103 billion). Therefore, any increase in manufacturing capacity for India would result in significant additional income for the nation. 

India is Becoming a Centre Stage for iPhone Production

The significance of this change is demonstrated by the fact that JP Morgan earlier predicted that by 2026–2027, 25–30% of iPhone manufacture would relocate to India. By the fifth year of the PLI scheme, Apple had originally promised to move just 10% of its production to India. But in the scheme's third year, it has already surpassed that amount. If US President-elect Donald Trump raises taxes on mobile devices (which are presently 15%), especially with regard to China, with whom the US is engaged in a trade war, the scenario could shift even further.

India, Vietnam, and other Southeast Asian nations may benefit from the punitive tariffs that Trump has suggested may reach 60%. Of course, if the government does not discover more measures to reduce tariff rates on components used in mobile devices, ease labour regulations, and improve logistics, Apple's vendor targets may alter. This is because China and Vietnam are more affordable than India. Furthermore, the difficulty of reaching value-addition goals of 35–40% by the PLI scheme's conclusion may make matters more difficult.


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