Apple Plans to Shift Up to 35% of iPhone Production to India Over 5 Years
Apple may raise India’s share of global iPhone manufacture to 30-35% from about 25% in the next five years, adding to the country’s importance in its global supply chain. Apple’s suppliers and contract manufacturers are likely to be backed up by government incentives and long-term tax benefits.
On September 1, Tim Cook will become the executive chairman of Apple Inc. and resign as chief executive officer. Indians will undoubtedly be watching this development with curiosity. It was in May 2016 during an Indian Premier League (IPL) match between the Gujarat Lions and Kolkata Knight Riders when Cook made his first visit to India.
Cook, who had spent the previous seven years honing his sales, global supply chain management, and industrial operations chops, was busy opening the first fully opened Apple stores in Delhi and Mumbai during his second official visit to India in April 2023. India is becoming one of the world's fastest-growing markets for iPhones and produces one out of four devices by the time John Ternus takes over the corner office at Apple's Cupertino headquarters three years from now.
Apple Shifting its Focus from China to India
In contrast to Cook's many journeys to China over the past decade, he only made two trips to India. This tells you a lot about the significance of both countries to the American tech business. His travels also provide a useful lens through which to examine the evolution of Apple's partnership with India, using China as a benchmark. Now that India is considered as more than just a safety net for Apple's iPhone assembly in China, the big issue is: what will happen when hardware engineer Ternus takes over?
Even though the plan is still in the works, the government has stepped in with a five-year incentive package for mobile phones worth INR 62,500 crore (after the PLI scheme in mobiles concluded in FY26). The majority of the gains, according to experts, will go to Apple Inc.'s suppliers. Tax exemptions for contract manufacturing will remain in effect until March 31, 2041, and the government has recently announced a new incentive programme. An extensive system of contracted manufacturers and assembly partners allows Apple to produce its wares on a worldwide scale.
According to a representative from the Ministry of Electronics and Information Technology (MeitY), the government anticipates that Apple will increase the percentage of its worldwide iPhone production that is manufactured in India from 25% to 30–35% within the next five years. He mentioned that the total yearly production value might increase from $25 billion in FY26 to $40-45 billion by FY31.
Evolution of iPhone’s Production in India
When iPhone manufacturing first began in India roughly ten years ago, it was a bumpy road due to concerns over reconditioned phones and high duty rates. Sources said that India just established a solid foundation in regard to Apple in the past five years. It is anticipated that Ternus would elevate it to a new level, incorporating India into Apple's product creation process rather than only its production pipeline.
That's a project that Cook is really enthusiastic about. In it, Apple discusses establishing a supply chain in India with forty or so companies, many of whom are domestic heavyweights like the Aditya Birla Group and the Tatas. According to a representative from the ministry, the electronics ecosystem being developed in precision engineering will also provide materials for other forms of deep technology that the govt is actively promoting, such as those in the aerospace, robotics, and defence industries.
