Following Donald Trump's victory in the US presidential election and the possibility of a renewed US-China trade war, Indian officials believe Apple may scale up its manufacturing capacities in India to mitigate potential tariffs and avoid supply chain disruptions that could arise.
The Economic Times, citing industry sources, reported that Apple could double its iPhone production in India from US$15-16 billion to over US$30 billion annually within the next two years if Trump follows through on imposing heavy tariffs on Chinese imports, potentially benefitting India.
Industry analysts project strong growth
According to The Economic Times, Neil Shah, vice president at technology researcher Counterpoint Research, stated that with growing premiumization trends and increasing demand for expensive iPhones globally, supported by the iPhone Pro series now being manufactured in India, the overall production value in India has the potential to exceed US$30 billion annually in the coming years.
Meanwhile, Business Standard reported that Apple and its suppliers aim to assemble 32% of the global production volume and 26% of the value of iPhones in India by fiscal 2027 (April 2026 to March 2027), which could result in a production value exceeding US$34 billion, assuming global iPhone sales remain consistent with fiscal 2024 levels.
These projections stem from discussions between Apple, its vendors, and central and state governments regarding iPhone assembly in India.
Strategic expansion already underway
In May 2023, Apple established Apple Operations India Private Limited, headquartered in Bangalore. The subsidiary is involved in the procurement of engineering equipment, leasing of facilities, and the employment of engineers for hardware development and production.
In October, Foxconn's Indian subsidiary, Foxconn Hon Hai Technology India Mega Development Private Limited, announced a transaction with Apple Operations Limited to acquire machinery and equipment valued at US$31.8045 million. This move is likely part of Foxconn's strategy to prepare for the ongoing expansion of its production capacity in India, aligning with efforts to scale up manufacturing operations in the country.
Historical context of US-China trade tensions
In 2018, then-President Donald Trump imposed tariffs on imports from various countries, with a particular focus on Chinese goods, targeting hundreds of billions of dollars worth of products in sectors such as electronics, machinery, and consumer goods. This trade war had far-reaching effects on global markets, disrupting supply chains and driving up prices for consumers.
Apple, as one of the major companies affected by these tariffs, faced significant challenges, as its products were not exempt from the levies. The impact of the tariffs accelerated Apple's diversification efforts, leading the company to implement its "China+1" strategy. This strategy aimed to reduce Apple's reliance on China for manufacturing by expanding production in other countries, including India, to mitigate the risks posed by the trade war and potential future tariffs.
