iPhone production in India could see a 2x growth annually

Published On: November 12, 2024

India is expected to benefit from the ongoing US-China trade war as Apple moves more and more of its production to our country. The company currently manufactures around $15-16 billion worth of iPhones annually. Thanks to various reasons, including Trump’s victory in the US elections, this figure could reportedly double in the coming two years. Let’s see how:

Trump’s win: challenges and opportunities for India

As per this recent The Economic Times report, if the newly elected US President Trump imposes the proposed 60 to 100 percent tax on imports from China, Apple could be encouraged to shift iPhone manufacturing to the neighbouring country, viz., India.

This will, of course, depend on how Modi-Trump relations evolve, especially considering India’s trade surplus with the U.S.

Still, an official told ET that “while India could lose in some areas, it could be a big beneficiary in areas such as electronics, especially iPhone production“.

To welcome this, India should reform relevant taxes and policies to enhance business prospects for foreign players like Apple.

If it plays its cards right, India could chip away at the majority of iPhone production still taking place in China (around 85 percent or above).

So far thanks to the Modi government’s Production Linked Incentive (PLI) scheme, 12-14 percent of iPhone production happens in India. But, it does face threats from markets like Vietnam.

More Apple stores and jobs in India

ET predicts this forecasted growth in iPhone production could lead to the creation of about 200,000 more jobs in India.

Anyway as India’s per capita personal disposable income increases, demand for iPhones and other premium purchases increases. Well, Apple only confirmed record revenue growth in India in the September quarter.

The company has also announced the rollout of more Apple Stores in Delhi NCR, Mumbai, Bengaluru, and Pune to tap more potential customers.

Even Apple’s contract manufacturers like The Tata Group are scaling up. The Tatas are setting up a second iPhone factory in Hosur, Tamil Nadu with up to 40,000 employees. Apple could ask its other partners like Foxconn and Pegatron also to expand their production capacities within the next 12 months.

India realises the potential opportunity here. In a recent press briefing, the Indian foreign minister, Mr. S Jaishankar rightly said this “reordering of supply chain gives us (India) a sort of second bite of the apple. And maybe this time around, starting with Apple, we are doing better than we were doing earlier (in the 90s and early 00s)“.