Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China.
The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly.
Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered by Indian Prime Minister Narendra Modi’s production-linked incentives aimed at turning India into the world’s factory. The subsidies have helped offset some of the structural cost disadvantages that manufacturers face in India, including the lack of a China-like robust supply chain and logistics challenges.
Photo: Reuters
Last year, shipments from China, where Apple still makes the bulk of iPhones, faced headwinds as a result of US tariffs related to the two economic powers’ trade war. The levies pushed Apple and its suppliers to move a greater share of devices meant for the American market to alternative manufacturing destinations, with India emerging as a major brightspot.
An Apple spokesperson declined to comment.
Even though the gap has narrowed, electronics assembly and component manufacturing still costs more in India than in countries including China and Vietnam. That’s prompted Apple, Samsung Electronics Co and others to seek more government support.
Companies are discussing with New Delhi another round of incentives to support export growth. India’s current production subsidies for smartphones expire on March 31 and with the US Supreme Court striking down some of the duties affecting China, India needs to move quickly to remain cost competitive.
Cupertino, California-based Apple currently assembles all versions of the latest iPhone 17 lineup in India, including the high-end Pro and Pro Max models. Its suppliers in India, including Foxconn Technology Group (富士康), Tata Electronics Pvt Ltd and Pegatron Corp (和碩), also build older models such as the iPhone 15 and iPhone 16 for local sales and export.
The rising output in India highlights Apple’s long-term supply chain strategy to build a second major iPhone manufacturing base to serve global demand. The company is deepening and widening its local supplier partnerships to make components including lithium-ion cells, watch and phone enclosures and accessories such as AirPods.
Beyond manufacturing, Apple is targeting market share gains in a region where sales have surged past US$9 billion. It’s preparing to launch Apple Pay in India later this year and its retail network now comprises six stores, underscoring the country’s growing importance as not just a production hub but also a fast-growing consumer market.
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