Strategic Shift: Moving iPhone Production to India

in a notable move driven by ongoing US-China trade friction, Apple is reportedly planning to shift the assembly of iPhones destined for the US market to India. This ambitious plan aims to have all iPhones sold in the United States, totaling over 60 million units annually, manufactured in India by the end of 2026.

This strategic realignment reflects a broader trend among multinational corporations to diversify their supply chains adn reduce reliance on single-source manufacturing, particularly in light of geopolitical uncertainties. The move could substantially boost India’s manufacturing sector and further integrate it into the global electronics supply chain.

Escalating Trade Tensions Fuel the Transition

The impetus behind Apple’s decision is the protracted trade dispute between the United States and China. The imposition of tariffs on goods imported from China, including electronics, has prompted Apple to seek choice manufacturing locations to mitigate the financial impact. While smartphones received temporary reprieve from tariffs exceeding 100%, they are still subject to a considerable 20% duty.

The US-China commercial war pushes Apple to review its chain of supplies.

This situation underscores the vulnerability of companies heavily reliant on Chinese manufacturing and highlights the importance of supply chain resilience in a volatile global trade environment.

India’s Growing Importance in Apple’s Supply Chain

India is rapidly emerging as a crucial hub for Apple’s operations. Recent data indicates a surge in iPhone shipments from India to the United States. In March alone, Apple’s primary Indian suppliers, Foxconn and Tata, shipped iPhones worth nearly $2 billion to the US, marking a new record. This surge suggests that Apple is already ramping up production in India in anticipation of the planned shift.

Furthermore, India’s own import duties, previously at 26%, are currently suspended as New Delhi pursues a bilateral trade agreement with Washington. This favorable trade environment further incentivizes Apple to expand its manufacturing footprint in India.

Impact on Global iPhone Shipments

In 2024, the United States accounted for approximately 28% of Apple’s global iPhone shipments, which totaled 232.1 million units, according to data from International Data Corporation (IDC). The shift of US-bound iPhone production to India represents a significant restructuring of Apple’s global supply chain and could have far-reaching implications for the electronics manufacturing landscape.

This move could also influence other tech companies to consider diversifying their manufacturing locations, potentially leading to a broader shift in global manufacturing patterns.