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Apple Inc could significantly increase its iPhone production in India, potentially exceeding $30 billion annually within the next two years, if US President Donald Trump follows through on his threat of imposing heavy tariffs on Chinese imports, according to a report by The Economic Times.
Apple’s iPhone production in India is currently valued at approximately $15-16 billion annually. However, Trump’s earlier threats to impose tariffs of 60 to 100 per cent on Chinese imports, a stance he reiterated during his campaign, could prompt Apple to shift more manufacturing operations to India. In his first term, Trump had implemented tariffs on Chinese goods, and experts believe a similar strategy during his second term could elevate India’s role in Apple’s global production network, the report noted.
Economic and strategic ties
A significant increase in iPhone production could strengthen Indo-US economic ties and impact broader trade dynamics. While some sectors in India may face challenges, the electronics industry — particularly iPhone manufacturing — stands to benefit substantially, the report said.
The report quoted an official as saying that India could gain significantly, especially in electronics, due to a potential increase in iPhone production.
Potential impact of tariff policies
Experts believe that Trump’s tariff policies, particularly on Chinese imports, could lead Apple to shift a considerable portion of its iPhone production to India. Such a move would likely create up to 200,000 new jobs and boost India’s share in global iPhone manufacturing to over 26 per cent in the coming years, up from the current 12 to 14 per cent, the report mentioned.
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As demand for premium iPhones continues to rise, especially with the iPhone Pro series now being produced in India, the value of iPhone production in the country could surpass $30 billion annually.
The report quoted Neil Shah, vice-president at Counterpoint Research, as saying that the production value in India has the potential to grow substantially in the next few years, driven by increased global demand for high-end iPhones.
Key factors for growth
The extent to which Apple increases its Indian production depends heavily on Trump’s actions after officially assuming office, as well as on India’s ability to address ongoing challenges like cost inefficiencies and policy uncertainties. For Apple’s strategy to succeed, the Indian government would need to continue implementing reforms to ensure that iPhone manufacturing does not shift to other countries, such as Vietnam, which also offer attractive alternatives, the report noted.
Over the past three years, Apple has shifted 12 to 14 per cent of its iPhone production to India, aided by the Indian government’s Production Linked Incentive (PLI) scheme. However, more than 85 per cent of iPhones are still manufactured in China. Apple has been rapidly expanding its production capacity in India, which is also the world’s second-largest smartphone market.
Apple works with three major contractors in India — Foxconn, Pegatron, and Tata Electronics (formerly Wistron) — to manufacture iPhones. Around 70 per cent of the iPhones produced in India are exported to markets including the US.
Tata Group’s new facility
The Tata Group is set to open a new iPhone facility in Hosur, Tamil Nadu, employing up to 40,000 workers. This new plant is expected to begin operations in the coming months. With the possibility of US tariffs on Chinese imports becoming a reality within the next year, Apple will need to accelerate its production expansion in India. However, experts caution that scaling up production at this level, particularly for export markets, will be a significant challenge for India, which has never experienced such large-scale manufacturing, the report stated.
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