Manufacturing iPhones in India: Apple’s Strategic Shift

Manufacturing iPhones in India is a major move for Apple. The company’s CEO, Tim Cook, revealed that the majority of iPhones sold in the United States during the April to June 2025 quarter will be produced in India. This reflects a notable change in Apple’s global production approach.

Details from the Earnings Call

During the company’s second-quarter earnings call, Cook indicated that “a majority of iPhones sold in the US will have India as their country of origin.” He further noted that Vietnam will contribute to nearly all iPad, Mac, Apple Watch, and AirPods sold in the US market.

Strategic Response to Tariff Policies

This announcement is part of Apple’s strategy to alleviate the effects of ongoing tariff policies imposed by US President Donald Trump, which specifically target products sourced from China. While certain tech items, including smartphones and semiconductors, have received a temporary exemption, Cook pointed out the potential financial burden of up to $900 million on Apple if the existing tariff structures remain. “We are not able to precisely estimate the impact of tariffs, as we are uncertain of potential future actions prior to the end of the quarter,” Cook stated.

Economic Drivers Behind the Shift

India is becoming increasingly significant in Apple’s supply chain for economic and strategic reasons. One major factor is the lower reciprocal tariffs applied to Indian-made products in comparison to those from China and Vietnam. To pre-emptively counteract impending US tariffs, Apple has accelerated its export efforts, as evidenced by six cargo jets that have recently transported about 600 tonnes of iPhones—around 1.5 million units—from India to the US since March.

China’s Continued Role

Despite the movement towards India, Cook reaffirmed that China will remain Apple’s principal manufacturing hub for most products intended for markets outside the United States. Presently, China is responsible for 76.6% of global phone production, with Vietnam accounting for 9.9%, India for 8.4%, and South Korea for 1.2%.

Growth of iPhone Production in India

Apple initiated the assembly of iPhones in India in 2017 through its contract manufacturers, beginning with entry-level models but expanding to Pro versions by 2022. During FY 2024–25, Apple assembled $22 billion worth of iPhones in India, representing a 60% increase compared to the previous year. At this point, India produces one in every five iPhones globally.

Challenges in the Chinese Market

On the downside, Apple’s sales in China experienced a 2.3% decline, falling to $16 billion in the March quarter. The company faces growing competition from domestic brands such as Huawei, Xiaomi, and Oppo. Additionally, Apple is dealing with delays in rolling out new artificial intelligence features, which complicates its standing in the region.

Looking Ahead

On a positive note, Cook reported record sales in multiple international markets, notably in India, and confirmed plans to launch new retail stores in the country later this year. In 2024 alone, Apple sold 75.9 million iPhones in the United States, emphasising the critical role this market plays as Apple reorders its supply chain.