An increasing number of multinational corporations are shifting their production lines out of China, with India emerging as a primary beneficiary. As of the six months leading up to September of this year, Apple’s iPhone exports from India have increased by one-third, highlighting the significant shift in production away from China. Apple is further expanding its manufacturing operations in India to reduce reliance on the Chinese supply chain.
Bloomberg reported on October 29th that sources familiar with the matter stated that Apple exported nearly $6 billion worth of iPhones manufactured in India, a one-third increase compared to the same period last year. Due to confidentiality concerns, the sources requested anonymity. This data suggests that India’s annual export value for the fiscal year 2024 is expected to exceed $10 billion.
Apple is rapidly expanding its production in India, leveraging advantages such as local subsidies, skilled labor, and the developmental capabilities of Indian technology. India plays a critical role in Apple’s efforts to lessen its reliance on Chinese production. In recent years, as U.S.-China relations have deteriorated with trade and tech wars erupting in various sectors, production risks in China have also escalated.
Apple’s three suppliers – Taiwan’s Foxconn Technology Group and Pegatron Corporation, as well as India’s Tata Electronics – all assemble iPhones in southern India. The Foxconn factory located in the outskirts of Chennai is India’s largest iPhone supplier, accounting for half of the iPhone export volume.
Sources revealed to Bloomberg that Tata group is a conglomerate involved in industries ranging from salt production to software, and its electronics manufacturing sector exported iPhones worth approximately $1.7 billion from their Karnataka state factory between April and September. Tata acquired the electronics division from Wistron Corporation last year, becoming Apple’s first Indian assembly partner for iPhones.
The iPhone value data refers to estimated factory prices rather than retail prices. Apple representatives declined to comment to Bloomberg, while spokespeople from Foxconn and Tata did not respond to requests for comments.
Apple began assembling iPhones in India for the first time in 2017, and production has continued to increase in recent years. Supply chain data indicates that approximately 30 million iPhones were assembled in India last year, with about 18 million produced in the first half of 2024 alone. It is projected that by the end of 2025, India will manufacture iPhones that account for 23% of the total production. These devices are not only targeted at the Indian market but also exported to the United States.
According to data from the Indian Ministry of Commerce, iPhones comprise a significant portion of Indian smartphone exports, making smartphones the largest export product to the United States in the first five months of this fiscal year, amounting to $2.88 billion. Five years ago, before Apple expanded its manufacturing operations in India, the annual smartphone export value to the U.S. was only $5.2 million.
The South China Morning Post reported on September 12 that a new report indicated Apple is significantly producing the latest iPhone 16 series in India, including the high-end Pro models. This signifies a major shift in Apple’s supply chain diversification strategy amid geopolitical challenges.
In June of last year, Apple CEO Tim Cook and other tech executives met with Indian Prime Minister Narendra Modi in Washington, emphasizing that India represents “tremendous opportunities.”
Gene Munster, Managing Partner at Deepwater Asset Management, once told CNBC that Cook is laying the groundwork for India to potentially surpass or rival China in scale.