Two months back, Apple made one of the biggest bets on India that you must know of. Apple will be making the latest 16 Pro Series in India for the very first time ever. Apple has bet big on India strategy to lessen its reliance on China. India could replace China as a driver of global growth — a result of which is why Apple now makes 14% of all global iPhones in India right now.
This bet is not only manufacturing-led, by the way — it’s also demand-led, as Tim Cook himself inaugurated Apple’s official stores in India for the very first time and is in plan to open many more soon. So why is Apple growing bullish on a country that only makes 2% of its entire revenue? What is the reality here? What can both Apple and India gain from this? And can India really be the next China?
We’ll cover everything in this blog post with the most latest data to make this the only article you need to read on this topic.
Why iPhones Matter So Much to Apple
Let’s start with the context first — why iPhones really matter to Apple so much. For that, we checked Apple’s financials and we found that iPhones have been making more than 50% of the company’s total revenue for the last three freaking years — which means that Apple makes roughly $200 billion from iPhones each year.
For context, $200 billion is roughly as much as the entire market capitalization of Reliance Industries. Yes — that’s how big iPhones are. This single product is a cash cow for Apple — a global phenomenon for which Apple needs to take the right bets on where they are actually making it and where they’re actually selling it.
The Complex Supply Chain of iPhone Manufacturing
But today we’ll be talking about something more complicated: the making of iPhones. See, Apple cannot actually manufacture iPhones itself at this scale — that’s why it only designs it and works on the software part in-house. All the manufacturing part? It actually outsources.
By the way, manufacturing is also often used very loosely — and there are two types of manufacturing, and both are very different.
Component Manufacturing
Component manufacturing involves making parts of iPhones — like screens, cameras, modems, etc. Apple has suppliers in roughly 45+ countries for these. For example:
- Displays come from Samsung (Korea)
- Cameras come from Sony (Japan)
- Modems come from Qualcomm
- Semiconductor chips come from TSMC
- Batteries come from TDK, COV, and more
The chain is huge — and also, just imagine the suppliers of these components as well. It’s like a huge economy run by a single product: iPhones.
Contract Manufacturing
Now let’s talk about contract manufacturers — these guys are assemblers who put all of these components together and give you your final product: the iPhone. This is done by a number of companies like:
- Taiwanese: Foxconn, Pegatron, Wistron
- Chinese: Luxshare, Wingtech
By the way, Foxconn is the biggest assembler of iPhones in the world, with roughly 60–70% of production globally — followed by Pegatron and others.
But here’s something interesting: irrespective of wherever all these companies are from — be it contract manufacturers or component makers — most of the factories are located in China.
In fact, even Foxconn — the biggest assembler — makes most of its iPhones in China. The city of Zhengzhou is often called the iPhone City as it has Foxconn’s biggest factory that alone produces 5 lakh iPhones. Also, 87% of all Apple component suppliers have production units in China.
So, Where Does India Come In?
Now that we have some context, let’s discuss where India comes into this — and how.
Demand-Led Growth in India
The first reason is that there’s great demand here. India is expected to become the third biggest market for iPhones very soon. Remember the BKC and Delhi store openings? People literally stayed in line for hours — like super fanboys.
iPhones have become the ultimate signaling tool for Indian consumers — and we can’t ignore it. While worldwide iPhone sales are flat or even dropping in countries like China (Apple’s second-biggest market after the US), Apple is having a tough time there. In fact, it’s not even in the top five players anymore.
So India is turning out to be a great market alternative — growing due to premiumization and rising per capita incomes.
The Manufacturing Shift
The next big reason is manufacturing — and this is the biggest one.
Apple–China relations have been strong for years, but now there are major setbacks:
- Geopolitical issues: US–China tensions, trade wars, and higher tariffs.
- Over-dependency: COVID times showed the risks of relying on one country, especially during China’s strict lockdowns that affected Apple’s biggest iPhone factory.
That’s why many Asian countries like Malaysia, Vietnam, Indonesia, Singapore, and India are stepping up — trying to become the next manufacturing hub.
India’s Strategic Push
India has been super bullish on driving the China Plus One narrative.
Here’s why India wants this:
- Grow economy by increasing exports
- Drive innovation and skill-building by learning from global players
- Contribute to GDP and employment (currently 10%+ unemployment)
- Attract more FDI, improve ease of business, and build global influence
Government Initiatives
To enable this, India has launched several initiatives:
- Make in India: Promote local manufacturing over imports.
- PLI Scheme: Give subsidies and reduce corporate/import taxes.
- Skill India: Upskill the workforce for manufacturing jobs.
In the past decade, India has gone from importing almost all phones to producing 99% locally — including brands like Samsung and Pixel.
Note: When we say “made here,” we mean assembled — we’re still importing most components. But it’s a start!
Apple’s Growing Bet on India
Apple used to make only entry-level models in India (since 2017) — but now it’s producing flagship models too.
India now accounts for 14% of total iPhone production, and Apple wants to take it to 25% — even 50%.
Foxconn, Pegatron, and Wistron have set up plants here, and this success will attract more component suppliers as trust in Indian manufacturing increases.
Interesting side note: Tata is making major moves in this space — more on that in another post.
Also, Tamil Nadu is leading the charge — contributing 33% of India’s electronics exports.
But Wait — What About Vietnam?
If you think India is the only contender for China Plus One, think again. Vietnam has made serious progress in electronics manufacturing.
Let’s compare:
- India exported $15B worth of phones last year.
- Vietnam exported $25B worth of phones.
Vietnam is already a key Apple manufacturing hub:
- 20% of iPads & Apple Watches
- 5% of MacBooks
- 65% of AirPods
And Samsung? Vietnam makes 60% of all Samsung phones.
Why Vietnam Is Ahead
Here’s what Vietnam is doing better:
- Lower import duties: Thanks to trade agreements like ASEAN.
- Component manufacturing: Not just assembly — actual part production.
- New product innovation (NPI): Working closely with suppliers to build and launch new products.
- Easier regulations: One-party government enables smoother land acquisition and policy decisions.
- Better infrastructure: Roads, ports, and connectivity are more developed than India.
The Big Picture: Can India Catch Up?
While Vietnam has a head start, India is catching up fast — and with the right investments and policy support, it’s a massive opportunity.
Apple and many others are placing big bets on India. The only question is: can we move fast enough?
Conclusion
Apple’s decision to manufacture iPhones in India is more than just a diversification strategy — it’s a powerful signal of India’s growing capabilities in high-tech manufacturing. While challenges remain (like import duties and infrastructure), government support and increasing global confidence in India’s potential make it a key player in the future of electronics production.
India may not yet be Vietnam — but it’s well on the path to becoming a serious alternative to China. And Apple’s bet may just be the first of many.
FAQ: Why Is Apple Manufacturing iPhones in India?
Q1: Why is Apple shifting iPhone production to India?
Apple wants to reduce its reliance on China due to geopolitical tensions, supply chain risks, and market diversification.
Q2: Is Apple making all its iPhones in India now?
Not yet. Currently, about 14% of global iPhones are made in India. Apple aims to raise this to 25–50% in the coming years.
Q3: Are iPhones really made in India or just assembled?
Most are assembled in India. Components are still mostly imported, but India is working on increasing local component production.
Q4: Why is India attractive for Apple?
Rising demand, government support, favorable policies like the PLI scheme, and a large workforce make India an attractive manufacturing hub.
Q5: How does India compare to Vietnam in this race?
Vietnam is currently ahead in terms of exports, component manufacturing, and infrastructure — but India is rapidly closing the gap.
