Beijing Blues, Bangalore Dreams?
Feeling the pinch from the tariff war initiated by the United States administration, Apple is reportedly charting a course to shift the assembly of the majority of iPhones destined for the US market to India by the close of 2026. This ambitious move aims to double Apple’s current production in the South Asian nation, significantly reducing its reliance on China.
Currently, the tech behemoth manufactures a staggering 80 percent of the 60 million iPhones sold annually in the US within China. This potential shift marks a crucial strategic step to alleviate some of the financial pressures stemming from the increased tariffs on Chinese goods.
The Financial Times initially broke news of Apple’s plans on Friday. Sources indicate that Apple, a company boasting a market capitalization exceeding $3 trillion, is actively engaging with its Indian manufacturing partners, including Foxconn and the Tata Group, to bring this plan to fruition.
Apple had already begun expanding its production footprint in India as a response to tariffs imposed during the previous US administration. Notably, the tech giant shipped a record $2 billion worth of iPhones, approximately 600 tonnes of cargo, from India to the US in March, marking peak figures for both Tata and Foxconn.
Indian Prime Minister Narendra Modi has actively promoted India as a prime destination for global smartphone manufacturing. Earlier this year, the nation eliminated import duties on specific components used in mobile phone production, providing a significant advantage to companies like Apple. According to Babak Hafezi, CEO of Hafezi Capital, this strategy aims to enhance India’s competitiveness as a leading manufacturing hub.
Reports from Bloomberg indicate that Apple assembled around $22 billion worth of iPhones in India during the 12 month period ending in March 2025, a substantial 60 percent increase compared to the preceding year. Despite this growth, only about 20 percent of the world’s iPhones are currently manufactured in India.
Roadblocks Ahead?
This production pivot won’t be without its costs for Apple. A Reuters report, citing an unnamed source, suggests that manufacturing iPhones in India is currently 5 to 8 percent more expensive than in China.
Dan Ives, an analyst at Wedbush Securities, commented that while India offers a solution, it won’t immediately eliminate Apple’s dependence on China and that this transition will likely take years, as Apple navigates the ongoing tariff complexities.
Earlier this week, The Information reported that Chinese authorities have seemingly created obstacles for Apple suppliers seeking to move operations from China to India, including unexplained shipment delays and blocked equipment exports. In some instances, export applications for Foxconn faced denial or delays of up to four months.
Ives further noted that a complete shift of US bound iPhone assembly to India could potentially cost Apple between $30 billion and $40 billion. Concerns also exist regarding India’s infrastructure capacity to handle such a significant surge in production. Hafezi pointed out existing infrastructure challenges in India, such as traffic and mobility issues, which could prolong production times and increase overall costs for the company. He emphasized the need for robust and reliable infrastructure to maximize manufacturing efficiency and global competitiveness.
Interestingly, this potential move by Apple coincides with signals from the US administration indicating a possible easing of trade tensions with China, amidst growing concerns about the economic repercussions of the tariff war.
Earlier in the week, the tech outlet The Information reported that Chinese authorities have created roadblocks for Apple suppliers to move operations from China to India. They have delayed shipments or blocked equipment shipments without explanation. In some cases, Foxconn had export applications denied and others delayed up to four months.
The news of Apple’s shift to India comes ahead of Apple’s upcoming earnings report.
