Apple’s New Frontier: Why the Future of iPhones Could Be Indian

A company that started in a garage with just three people, and today, it earns more than $1,800 every second. Its first logo showed Isaac Newton sitting under a tree, not a bitten fruit. One of the co-founders sold his 10% stake for just $800, worth over $100 billion today. This tech giant has over 150,000 employees and a fan base that treats every product launch like a global event. Its devices are so iconic that some people even collect the boxes! With sleek design, innovative marketing, and a cult-like following, this company has become the first to cross a $3 trillion market value.

Guessed it already? Of course, you did—it’s none other than Apple Inc. From its bold ideas to its massive impact, Apple continues to shape the future, and now, it's making bold new moves by shifting its focus from China to India.

The China Conundrum

Around 1997, the tech giant was on the verge of bankruptcy as it struggled to keep up with its rivals. That is when it was saved by China’s opening of the Economy to foreign companies to boost employment. It was in 2001 that Apple officially arrived in China and partnered with Foxconn, a Taiwanese electronics manufacturer operating in China for production. Apple's chief executive, Tim Cook, clearly mentioned in an interview last year how no supply chain in the world is more critical to the company than China. The company has over 200 suppliers and an overwhelming reliance on the country. But the question that arises is, why do the company move out of the country in the first place?

All of this began during COVID-19. The lockdown and harsh regulations imposed by China hurt production at Apple’s largest plant in the country. Factory lockdowns and disruptions severely impacted Apple's production schedules and delayed deliveries. This experience highlighted the urgent need for greater supply chain resilience and diversification to mitigate future shocks.

Another reason is the company’s overdependence on China for manufacturing, which has proved to be a double-edged sword.. While China offers a large pool of labour and infrastructure at a very low cost, overreliance poses a significant threat in the case of geopolitical tension.

The US-China tariff war, initiated by Donald Trump, poses a direct risk to the company due to a high surge in the cost of production. Apple's supply chain was significantly threatened when the US president placed tariffs on Chinese imports that could reach 125%. Such policies cause instability in the way the business operates. Finally, because of the intense competition from local brands like Oppo and Huawei, the Chinese market is currently exhibiting symptoms of congestion. Diversification is therefore essential.

It is essential to realise that Apple's "exit" from China is a planned action rather than a sudden departure.

India’s Emergence as Next Market Frontier

Amidst this restructuring in the global production footprint, India has emerged as a viable option for Apple, offering a powerful combination of potential and manufacturing incentives. Despite Trump’s ambition to make iPhones in the US, Apple is unlikely to move production there soon due to a shortage of facilities and labour needed to produce the devices.

 Apple owns about 8% of India’s smartphone market, where its sales reached almost $8 billion in fiscal 2024, with iPhones being the major contributor. According to a report by the Financial Times, Apple plans to transition all US-bound iPhone assemblies to India by 2026. There are various reasons for the move:

Economic Incentives and Policy Support 

To draw in foreign manufacturers, Indian Prime Minister Mr. Narendra Modi launched the Production Linked Incentive (PLI) program. Numerous state subsidies have been introduced as a result of the PM's goal of turning the nation into a manufacturing hub. This program makes India a desirable location for Apple by providing financial incentives to businesses starting or growing production facilities there.

Immense Market Potential

India's middle class, a young demographic, comprises 31% of the total population and is estimated to grow to 38% by 2031. Approximately 65% of this middle class is under 35 years old.  The rising disposable income and an increasing middle class create a solid ground for increased consumption of premium electronics. Apple's recent opening of flagship retail stores in India is also a strong indicator that the company is tapping into this consumer base.

Financial Viability

 Even with potential tariffs, manufacturing in India remains significantly more cost-effective than in the US. According to a report by the Global Trade Research Initiative (GTRI), a drastic difference has been highlighted in labour costs. An assembly worker in India earns around $230 per month, compared to approximately $2,900 in California. This translates to an assembly cost of about $30 per iPhone in India versus around $390 in the US.

Despite all the perks, complete transition to India is still far ahead. According to the International Data Corporation, the US accounted for about 28 per cent of Apple's 232.1 million global iPhone shipments in 2024. This means that Apple would require doubling the current iPhone output in the country, where the company has been steadily building capacity with contract manufacturers Tata Electronics and Foxconn. In 2022, Bloomberg Intelligence estimated it would take eight years to move just 10% of Apple’s production capacity out of China.

Apple seeks greater investments in India, whereas China threatens to interfere. As much as Apple strives to shift the location of its subsidiaries, the Chinese government still seeks to impose restrictions, to some level. The information revealed that Chinese officials have been inexplicably stalling or halting the supply of iPhone manufacturing equipment in India. In many scenarios, there is a lack of clarity as to why Chinese authorities are not permitting deliveries of the iPhone equipment to India or are simply keeping it on hold. The Information emphasised and clarified that the duration necessary for obtaining permission to export the system for assembling iPhones from China to India has increased from two weeks to four months.

In a particular situation, Chinese officials are said to have denied permission to one of Apple’s Chinese equipment suppliers to export the platform necessary for trial simulation of the iPhone 17 to India. The supplier has set up a sham firm in Southeast Asia to escape these barriers.

Trump's Rhetoric vs. Economic Reality

During his presidency, Donald Trump's "America First" policy often included strong calls for American companies to return manufacturing jobs to the US and "exit" China. While his idea undeniably catalysed a re-evaluation of global supply chains, the effectiveness of his direct commands on corporate behaviour was often limited by the harsh realities of international economics.

For a company like Apple, which relies on a huge, specialised network of suppliers and factories built up over decades in China, suddenly pulling out isn’t realistic. Moving production isn’t just about shifting machines—it means rebuilding a whole system of skilled workers, specific parts, and fast delivery networks.

While Trump’s actions were framed as tricky political moves, the fundamental drivers behind companies shifting their manufacturing—like Apple, are long-term strategies around reducing risk, accessing new markets, and staying economically competitive. His policies didn’t create a cheaper or faster manufacturing option in the U.S. In fact, studies like the GTRI report show that making iPhones in India is still much more cost-effective than doing so in America, even with high tariffs.

That said, Trump’s tough talk did have one significant impact: it pushed companies to speed up their plans to look beyond China. So, it’s not that Apple ignored the need to reduce its dependence on China—they just knew it couldn’t be done overnight or through political speeches. It takes time, planning, and investment to rebuild something so complex.

Conclusion

Apple’s significant shift toward India marks the beginning of a new chapter in how the company makes and moves its products worldwide. The main reason? Apple wants to reduce its heavy dependence on China and sees enormous potential in India’s fast-growing economy and large market. Moving such a massive supply chain won’t be quick or easy, but India is quickly becoming a strong and promising option for Apple’s future. More than anything, this move shows that in today’s global economy, smart business decisions are guided by real-world challenges and opportunities, not just political noise or headlines.

References:

1. New York Times. (2025, May 1). Apple faces new tariffs amid shifting China strategy. https://www.nytimes.com/2025/05/01/technology/apple-china-tariffs.html

   
   

2. Yahoo Finance. (2025, April 30). Apple’s big India move: U.S.-China tensions push iPhone maker to bet on India’s future. https://finance.yahoo.com/news/apples-big-india-move-u-153102583.html

   
   

3. Times of India. (2025, April 26). How China is trying to stop Apple’s big iPhone move to India. https://timesofindia.indiatimes.com/technology/tech-news/how-china-is-trying-to-stop-apples-big-iphone-move-to-india/articleshow/120617573.cms

   
   

4. The Economic Times. (2025, April 20). Apple India produces $22 billion of iPhones in shift from China. https://economictimes.indiatimes.com/industry/cons-products/electronics/apple-india-produces-22-billion-of-iphones-in-shift-from-china/articleshow/120245833.cms?from=mdr

   
   

5. The Economic Times. (2022, November 24). Apple makes about Rs 1.5 lakh every second, Microsoft pockets Rs 1.1 lakh. https://economictimes.indiatimes.com/tech/technology/apple-makes-about-rs-1-5-lakh-every-second-microsoft-pockets-rs-1-1-lakh/articleshow/95743327.cms?from=mdr

   
   

6. The New Indian Express. (2025, January 31). Apple is expanding manufacturing in India to meet domestic demand and global export needs: Tim Cook. https://www.newindianexpress.com/business/2025/Jan/31/apple-expanding-manufacturing-in-india-to-meet-domestic-demand-global-export-needs-tim-cook

   
   

7. News24. (2025, May). Made-in-India iPhones to remain cheaper in the US even after Trump’s 25% tariff, says report. https://news24online.com/tech/made-in-india-iphones-to-remain-cheaper-in-the-us-even-after-trumps-25-tariff-says-report/569684/