Apple Inc. and its suppliers are making a strategic shift toward India, with plans to produce a significant share of global iPhones in the country. By the 2026-27 fiscal year, company is targeting India for 32% of its global iPhone production volume, which could generate an impressive US$34 billion in production value.
This goal aligns with the Indian government’s Production-Linked Incentive (PLI) scheme, designed to attract large-scale manufacturing. The increase in iPhone production in India could strengthen supply chain while offering substantial economic benefits for India.
India’s Role in Apple’s Production Strategy
The decision to increase iPhone production in India stems from a confluence of factors, including the rising demand for iPhones globally and its need to diversify its manufacturing away from China.
The PLI scheme, launched by the Indian government, provides financial incentives to foreign companies setting up large-scale manufacturing operations in India, making it an attractive alternative for company and its suppliers.
Vendors and government officials have collaborated to project that by 2026-27, India could account for one-third of the global iPhone production volume and over a quarter of its value.
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In the 2023-24 fiscal year, India contributed 12-14% of total iPhone production volume, translating into approximately US$14 billion in production value. By the end of the 2024-25 fiscal year, this production value is projected to reach US$18 billion, with a market value of around US$27 billion.
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If these trends continue, India’s production capacity for iPhones could have a significant impact on global sales, making India a critical player in global supply chain strategy.
The Economic Impact of iPhone Production in India
The shift of iPhone production to India holds enormous potential for economic growth. If India achieves its target of producing 32% of global iPhones by 2026-27, this could generate an estimated US$34 billion in production value, translating to increased revenue for the Indian economy.
The move aligns with India’s broader “Make in India” initiative, which aims to position the country as a global manufacturing hub. By attracting high-profile companies like Apple, India not only boosts its economic standing but also generates jobs, technology transfers, and skill development opportunities.
This move helps mitigate risks associated with over-reliance on China for production. With an increasing share of iPhones being manufactured in India, can reduce its dependency on a single country for manufacturing.
Moreover, the introduction of high-value models like the iPhone 16 Pro series in India further enhances the country’s role as a high-tech production base, contributing to India’s technology sector and positioning it as a more prominent player in global electronics manufacturing.
The Future of Apple Production in India
As Apple and its suppliers continue expanding in India, the potential for further investment is significant. Currently, vendors project a freight-on-board (FOB) production value of US$9 billion for the first half of the 2024-25 fiscal year.
By year-end, India’s production share is expected to reach 17-18% of the global volume and 14% in terms of value, laying the groundwork for a higher target in the following years. With a projected 32% of production volume from India by 2026-27, Apple’s transition to India signals a long-term commitment to increasing its manufacturing footprint outside China.
By continuing to invest in India also helps solidify the nation’s position in global manufacturing. This strategic move is likely to encourage other tech companies to establish operations in India, further supporting the government’s initiatives to promote foreign investment and stimulate industrial growth.
If successful, this strategy could set a precedent for other companies, encouraging them to leverage India’s manufacturing potential.
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