If Apple’s manufacturing companions in India are capable of pull this off, it’ll be nothing wanting a coup. There are solutions that Apple intends to shift manufacturing of all US-bound iPhones from China to India in its entirety. Meaning, round 60 million extra iPhones could also be made in India, destined particularly for the US — this along with iPhones already made right here for home consumption, and exports.
Apple iPhone 16 fashions on show throughout the launch of the collection on September 20, 2024. (AFP Picture)
There are three distinct but overlapping items that want to come back collectively. The present iPhone manufacturing capability in India with headroom for growing native consumption in addition to an upward export trajectory, investments lined up by Apple and their companions Foxconn in addition to Tata Electronics so as to add extra manufacturing capability, and sourcing of uncooked supplies for which any manufacturing facility nonetheless largely depends on China. Apple has not confirmed, or denied, these conversations.
A bigger share of the pie
India’s manufacturing share, relying on estimates, ranged between 10% to twenty% on the finish of 2024. Apple’s world iPhone shipments for the yr had been 232.1 million. Apple doesn’t launch country-specific manufacturing knowledge.
“Our estimations are that in 2024, the production levels of iPhones in India was around 43 million units. They export around 32 million out of this, and the rest are sold in India,” factors out Navkendar Singh, analyst with Worldwide Knowledge Company (IDC) Asia Pacific.
Whereas India has been assembling iPhones in India since 2017, and yearly growing that capability, it was final yr when the iPhone 16 Professional and iPhone 16 Professional Max marked a starting of the ‘Pro’ iPhone manufacturing within the nation.
That performed its half in bucking the pattern of generational inflation that’s frequent with annual smartphone improve cycles — the truth that iPhone 16 Professional telephones value lesser than their predecessors, pressured Android telephone makers together with Samsung and OnePlus to implement pricing corrections on their flagship telephones.
“The projections for 2025 indicate a rise to 26-28% share, underscoring India’s increasing role in Apple’s global supply chain,” says Prabhu Ram, Vice President – Trade Analysis Group, at CyberMedia Analysis (CMR).
The iPhone manufacturing in India, beginning with the low-cost iPhone SE, scaled shortly with three companions, Foxconn, Wistron and Pegatron, within the early years. The massive enhance offered by the federal government of India’s Manufacturing-Linked Incentive (PLI) scheme.
At the moment, Foxconn is producing greater than 60% of all iPhones being put collectively in India, and have dialled up investments lately — this features a $1.5 billion funding in increasing the plant close to Chennai, and anticipated to be committing to a brand new facility close to Noida.
Tata Electronics, which acquired Wistron, and has a majority stake in Pegatron’s Tamil Nadu facility, is additional investing in the direction of capability enlargement.
These investments will likely be essential to creating room for the massive shift from China, within the coming years.
Offering a backdrop can be the ₹76,000-crore India Semiconductor Mission, for example, investing $11 billion in a three way partnership between Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Company (PSMC) to construct a semiconductor fab in Gujarat. Items by Micron, CG Energy and Kaynes Semicon, are different examples.
Within the fiscal yr ending March 2025, Apple is estimated to have produced $22 billion price of iPhones in India, which is a 60% enhance, over a yr prior.
The place will we go from right here? “Even with best efforts, I don’t see Apple manufacturing more than 50 million iPhones a year in India, out of which 20-25% will be consumed domestically and rest exported to other countries,” says Faisal Kawoosa, Chief Analyst and co-founder of Techarc.
IDC’s Singh expects India’s iPhone consumption to extend from current 11 million models, to round 20 million, in coming years.
An enormous, sophisticated shift?
Simpler stated than accomplished, however a big shift may be very a lot on the anvil. There’s little consensus on whether or not in any respect an entire replication and alternative of manufacturing of US-bound iPhones from China to India is in any respect doable.
“In 2024, roughly 1 in 4 iPhones globally available was shipped to North America (NAM) which includes US and Canada,” notes Abhilash Kumar, Trade Analyst at TechInsights, a analysis agency.
Kumar believes that India’s iPhone manufacturing capability will doubtless double in 2025, however even then, is not going to be sufficient to satisfy the Indian in addition to US demand. However that mission is only a additional step away.
“Reliance on China will decrease significantly. By end of 2026, we expect India should be capable to meet North America and India demand,” he explains the explanation for his confidence.
IDC’s Singh notes that factoring in an upward trajectory of India’s iPhone demand, calculations clarify the place this dialog stands. “It means Apple and their partners will need capacity to produce 20 million plus 60 million iPhones in India to meet all the demand for India plus for the US,” he computes.
Tata Electronics declined a touch upon any doable realignment of manufacturing between China and India.
“Theoretically the shift is possible, but in reality it might not be feasible. Our manufacturing is an extension of Chinese manufacturing ecosystem and we rely on components from China,” notes Techarc’s Kawoosa.
“We estimate that scaling up iPhone production in India would entail investments upwards of $200 million by Apple and its partners over next couple of years. Eventually, it might need to go up to $500 million,” Kawoosa estimates, including China’s stronghold on the element ecosystem, offers it leverage.
“I feel China might already be hunting for strategic potential partners, like middle eastern countries, who they could work with to bypass the reciprocal tariffs,” he provides.
Items of the puzzle
Sourcing of elements, and an overbearing reliance on China, leaves little by way of flexibility for tech firms akin to Apple, and their manufacturing companions. For the foreseeable future, issues are unlikely to vary.
CMR’s Ram says it’s essential to recognise deep interdependencies inside the provide chain. “With China still serving as a critical source for key components and raw materials, any supply chain disruptions or new tariffs on Chinese parts could still impact iPhone production timelines and costs,” he says.
Timelines being indicated (that’s, finish of 2026) for Apple’s intent to shift manufacturing from China to India, is one thing IDC’s Singh disagrees with.
“I believe the 18-month timeline is slightly premature. The 80 million target can happen in two and a half or three years but that’s also going to be tricky. Especially the fact that we know from our sources that whenever production lines have to be expanded and precision machines are set up, those engineers still come from China,” he says.
Foxconn didn’t reply to HT’s requests for remark.
“India’s manufacturing chains or Apple’s dependency on high value components, screens, processors etc. everything from China and Taiwan, will remain for a foreseeable future,” says Singh. He explains {that a} semiconductor facility itself has a timeline so long as 15 years, and even then, they might start initially with bigger 10-nanometer structure chips.
The current technology A18 Professional chip is a second-generation 3-nanometer course of (TSMC N3E, to be exact), with particular deal with efficiency per watt metrics, in addition to synthetic intelligence (AI) processing.
iPhone manufacturing services, with a typical template anyplace on the earth, together with exact robotic meeting strains and testing gear, stringent high quality management, in addition to important capital funding for coaching in addition to skilling the workforce.
That is one thing Apple CEO Tim Prepare dinner alluded to lately, when he famous that the manufacturing reliance on China shouldn’t be because of prices, however because of availability of expert labour and superior tooling.
For China, an instantaneous precedence will likely be to safe a beneficial commerce settlement with the US,” says CMR’s Ram. One factor is evident, tech firms are discovering methods to speed up a shift away from China by diversifying provide chains and manufacturing strains, as a lot because the ever-changing specifics permit.