India Overtakes China in iPhone Exports to the US

India has achieved a significant milestone, surpassing China in monthly iPhone exports to the United States. This change highlights a crucial transition in Apple’s worldwide supply chain strategy. In April 2025, India delivered 3.3 million iPhones to the US, representing a remarkable 76% year-on-year growth. During the same period, exports from China plummeted dramatically to only 900,000 units, as reported by Canalys, now part of market research firm Omdia.

Impact of Trade Policies

This transformation aligns with increasing trade tensions and the reinstatement of high tariffs on Chinese imports during the administration of former US President Donald Trump. Currently, iPhones made in China are subjected to a 30% import duty, while those manufactured in India benefit from a base tariff of just 10%. Although Trump exempted iPhones from tariffs on 11 April, Apple had already commenced stockpiling inventory for the US market in March, resulting in exports from India rising to a peak of 4.4 million units that month.

Shifting Market Dynamics

From January to April 2025, China still led overall shipments by exporting 13.2 million iPhones to the US, compared to India’s 11.5 million. Nevertheless, analysts suggest that the trend is clearly changing. Le Xuan Chiew, research manager at Omdia, stated to CNBC that India has been progressively closing the gap each month.

Apple’s Investment in India

Apple has been diversifying its manufacturing efforts since the COVID-19 pandemic and has made substantial investments in India’s supply chain. Foxconn, the main assembler of iPhones in India, is broadening its operations. Additionally, Tata Electronics, which now oversees Wistron’s former operations and manages Pegatron’s local assembly, has initiated the assembly of the iPhone 16 and 16e at its facility in Hosur. Reports indicate that Apple assembled iPhones worth $22 billion in India for FY25.

Challenges Ahead for India

The United States continues to be Apple’s largest iPhone market, with quarterly demand estimated at approximately 20 million units. However, analysts contend that India is not currently prepared to fulfill this demand entirely. Chiew remarked that India’s manufacturing capacity is unlikely to expand swiftly enough to accommodate the entire US requirement and added that full-scale production may not be achievable before 2026.

Geopolitical Pressures on Apple

Despite India’s advancements, Apple now faces challenges from both Beijing and Washington. China is unhappy with the shifts in Apple’s supply chain, while Trump has publicly criticized the company for not relocating iPhone production to the United States. He noted on Truth Social last week that he has previously communicated to Tim Cook of Apple his expectation that iPhones sold in the US should be produced domestically rather than in India or elsewhere, even threatening a 25% tariff on non-US manufactured iPhones.

Feasibility of US Production

However, experts believe that the idea of manufacturing all iPhones in the US is neither practical nor economically sound. Dan Ives, an analyst at Wedbush Securities, commented that the notion of Apple producing iPhones in the US is unrealistic given the current labour and cost structures. He estimates that this shift could potentially raise iPhone prices to as much as $3,500.

While India’s emergence as a manufacturing centre represents a strategic victory for Apple, analysts warn that the momentum may level off as the year progresses. Nonetheless, with ongoing investments, including Foxconn’s recently announced $1.5 billion expansion in India, the path appears evident: Apple is steadily decreasing its reliance on China, with India rapidly becoming essential to this strategy.