Apple has relocated a sizable amount of its iPhone assembly activities from China to India, thereby bolstering the electronics manufacturing industry in that nation.
In 2023–2024, India shipped cellphones valued at over $15 billion, of which $10 billion or 65% were iPhones.
Apple Relocates iPhone Assembly From China To India
With the deal that Tata Electronics obtained, it will be the first time that an Indian business assembles iPhones. Due in large part to Apple’s manufacturing activities in India, the business directly employs 1.5 lakh people, the majority of whom are women. This has resulted in substantial job prospects.
It is projected that the ecosystem of suppliers connected to Apple’s activities will employ close to 5 lakh people over the course of the next three years. Apple’s primary manufacturing facility in Sriperumbudur, India, is undergoing infrastructural development, which includes the building of worker dorms.
In FY24, almost one in seven iPhones sold worldwide were produced in India; by 2028, the government anticipates that this percentage would rise to a quarter. Within the next two to three years, Apple plans to increase iPhone production in India to over 50 million handsets annually.
High import tariffs on components and New Delhi’s unfavorable attitude toward Chinese businesses present difficulties for Apple’s Indian suppliers.
There are difficulties in lowering dependency on China, as evidenced by the small number of Indian suppliers in Apple’s supply chain despite the country’s increasing significance. Apple’s decision to expand iPhone assembly in India has been encouraged by government programs including the production-linked incentive (PLI) plan for smartphone production.
Contract Manufacturers Have Reached Investment and Sales Thresholds
Under the PLI plan, contract manufacturers including Foxconn, Pegatron, and Wistron (now owned by Tata) have reached investment and sales thresholds. Due to Apple’s growth, other businesses, such as Google, are considering the possibility of building phones in India, which has resulted in the emergence of local contract manufacturers.
India’s labor pool is attractive to foreign firms who want to take advantage of the country’s manpower since it is well-suited for assembly operations.
A number of international vendors, such as Foxlink, Flex Ltd., and Sunwoda Electronic Company Ltd., have set up production plants in India to provide Apple with parts. One of the main obstacles to investment in India’s electronics manufacturing business is the country’s high import taxes on smartphone components.
In an effort to allay worries about import duties, the Indian government is partnering with the Commerce Ministry to lower or eliminate taxes on a number of components. Import tariffs should be lowered and tax rates should be harmonized in order to draw in additional suppliers and support the expansion of India’s electronics manufacturing sector.
