Apple's Big Bet on India: A Supply Chain Makeover

Apple is expanding its iPhone 17 production to five factories in India, including two recently opened facilities, as part of its ongoing effort to reduce reliance on China for U.S.-bound devices. The company is manufacturing all four iPhone 17 models in India ahead of their expected launch next month, a milestone marking the first time all new models will be shipped from the South Asian country from the outset [1]. This strategic shift is part of Apple’s broader manufacturing diversification plan, driven by efforts to mitigate the impact of U.S. tariffs on Chinese exports. The expansion includes production hubs operated by the Tata Group and Foxconn Technology Group [1].

The production shift is already yielding tangible results in export volumes. In the four-month period beginning in April, India exported $7.5 billion worth of iPhones, up from $17 billion over the entire previous fiscal year. This increase highlights the rapid growth in India’s role within Apple’s global manufacturing footprint. Notably, Tata Group’s production sites in Tamil Nadu and Karnataka are expected to account for as much as half of India’s iPhone output within the next two years, signaling the company’s rising importance as an Apple manufacturing partner [1]. Foxconn’s facilities near Bangalore are also part of the expansion, with recent operational ramps indicating strong progress in India’s production readiness.

Apple’s India-based production strategy also extends to future models. The company is already planning to manufacture a new iPhone 17e, set to launch early next year, and is discussing production plans for the iPhone 18. These plans underscore Apple’s commitment to India as a core manufacturing hub, despite the imposition of a 25% tariff on Indian goods by the Trump administration, in part due to India’s oil imports from Russia [1]. CEO Tim Cook has pledged a $600 billion investment in U.S. operations over four years, partly to secure continued tariff exemptions for India-made iPhones. Currently, consumer electronics including iPhones remain exempt from sectoral tariffs, though the evolving trade policy environment remains a concern.

In parallel with its production expansion, Apple has been steadily enhancing its India-based operations beyond manufacturing. The company now engineers, develops, and tests iPhones in India, leveraging its growing local talent pool. The expansion of its supplier base has been supported by state-level subsidies under Prime Minister Narendra Modi’s government, helping to offset some of the costs associated with shifting production from China [1]. Despite these efforts, China has attempted to counter the trend by discouraging technology transfers and equipment exports to India and Southeast Asia. Foxconn has also repatriated some of its Chinese engineering staff, with Apple relying increasingly on engineers from Taiwan and Japan to maintain production levels.

Apple’s India manufacturing strategy was first tested in 2017 with the iPhone SE model and has since matured into a significant component of its global supply chain. The Tata Group has become the primary Indian assembler of iPhones, following its acquisition of Wistron’s factory in Karnataka and a controlling stake in Pegatron’s plant near Chennai [1]. This consolidation of production under Indian ownership reflects the long-term nature of Apple’s commitment to the region. As U.S.-China trade tensions persist, Apple’s efforts to diversify its manufacturing base are likely to continue shaping its global supply chain strategy in the coming years.

Source:

[1] Apple Expands iPhone Production in India for US-Bound ... (https://www.bloomberg.com/news/articles/2025-08-19/apple-expands-iphone-production-in-india-for-us-bound-new-models)

[2] Apple to Manufacture Full US-Bound iPhone 17 Lineup in ... (https://finance.yahoo.com/news/apple-manufacture-full-us-bound-121630896.html)