Long before the United States imposed tariffs on China, Apple had been gradually shifting its iPhone production to India. The company even aimed to transfer its entire assembly line by 2027. However, the project now faces some major challenges due to the advanced technological requirements, and it looks like Apple can’t reduce its reliance on China anytime soon.
Apple, China, and India: The Technology Cold War
Apple started producing iPhones in India as early as 2017, starting with the iPhone SE. The company eventually started assembling the latest models here in 2023, notably the iPhone 15 and the iPhone 15 Plus. India already accounts for almost 10% of the global iPhone supply, and Apple even wanted to shift its entire assembly line here.
It is worth noting that Apple does not set up its own facilities, and sources out its iPhone production to Foxconn, Wistron, and other key players. In 2023, the Tata Group acquired Wistron’s iPhone factories in India, making it the first Indian company to manufacture iPhones.
As proud as it sounds, the unfortunate truth is that India currently only handles the assembly of iPhones. The core components, such as the processor, display panels, battery packs, etc., are still exclusively made in China. These spares are imported and assembled in India, just like IKEA furniture. It’s not possible to build an iPhone without involving China.
Apple’s motive was always to bring its assembly lines to India for two major reasons: The first was to reduce its dependency on China, and second reason was to gain benefits from schemes like PLI (Production-Linked Incentive) schemes where the company can get tax rebate and various other financial benefits from the Government of India.
Prior to 2023, Apple was only assembling base and plus models in India (iPhone 15 and iPhone 15 Plus). The company has made great progress and has started producing the iPhone 16 Pro and 16 Pro Max models as well.
The latest report from Bloomberg mentions that Apple is working on two special models to celebrate the 20th Anniversary of the iPhone. However, the technology and tooling required to assemble these devices are very complex and cannot be brought to India anytime soon. Apple is left with no choice but to produce these upcoming iPhones in China.
Experts suggest that India can assemble one-third of the annual iPhone demand in the United States, and the capacity will grow further. The Tata Group is also setting up the second-largest iPhone production facility in the world. However, these projects will take a while to complete, and Apple is unlikely to shift its entire iPhone assembly to India by 2027.
It is worth noting that the United States has imposed a 145% tariff on Chinese goods, which can rapidly increase the iPhone prices if these are made in China. The tariff rate for Indian goods is 26%, which is proposed to be cut down to as low as 10%. This makes it even more apparent why Apple wants to shift its assembly to India.
