Apple’s Shift to India for Component Manufacturing: Detailed Reasons and Growth
Apple, one of the world’s leading technology companies, has traditionally relied on China for its manufacturing needs. China has been a crucial hub for Apple’s production, especially for popular products like the iPhone. However, Apple is now shifting its component manufacturing from China to India, a move driven by several factors including economic, political, and social considerations.
1. Apple’s Manufacturing Journey in India: Initial Steps
Apple began its manufacturing journey in India in 2017, initially assembling the iPhone SE model. At the start, the production was mainly focused on assembling units for the domestic market. However, in 2021, Apple expanded its operations to manufacture iPhones in India. Now, a variety of Apple products including iPhones, MacBooks, iPads, and AirPods are being manufactured in India.
2. Challenges in China
Apple’s largest manufacturing partner in China has been Foxconn, which handles a significant portion of iPhone production. Foxconn was responsible for more than two-thirds of iPhone production. However, during the COVID-19 pandemic, Foxconn’s factories in China were temporarily shut down, leading to disruptions in global iPhone sales. This situation prompted Apple to rethink its reliance on China and look for alternative production hubs, with India emerging as a viable option.
3. Reasons for Choosing India
a) Government Incentive Programs: The Indian government’s Production-Linked Incentive (PLI) scheme has played a pivotal role in encouraging foreign companies to set up manufacturing bases in India. This scheme provides incentives for increasing production in India, thus making it an attractive option for Apple.
b) Cost Efficiency and Production Capacity: India’s growing manufacturing ecosystem, along with its large English-speaking workforce, has made it an ideal location for Apple to expand its production capabilities. India offers cost-effective labor and a skilled workforce that can meet international standards.
c) Technological Capabilities and Factory Network: India is home to several key tech companies such as Dixon Technologies, Amber Electronics, and others that are partnering with Apple for local component manufacturing. This collaboration helps Apple meet its high standards for production and component sourcing, while also fostering a robust local supply chain.
4. Increase in Production Volume
In 2022, Apple produced 15 million iPhones in India. By 2023, this number grew to 25 million, accounting for about 12% of the global iPhone production. In 2024, the production is expected to rise further, with projections indicating an increase of up to 23%. India has become a significant manufacturing hub, and this growth trajectory suggests that Apple will continue to ramp up production in the country.
5. Shifting Away from China
As Apple looks to reduce its dependency on China, the company has been increasing the number of its manufacturers in India. In the past year, Apple’s manufacturing partners in India grew from 48 to 52, and by the end of fiscal year 2025, it is estimated that Apple will create 600,000 jobs in India. Additionally, Apple’s direct workforce in India is projected to reach 200,000 by next year, with 70% of these workers expected to be women.
6. Current Status and Future Prospects
In 2023, Foxconn invested $1.5 billion in Tamil Nadu to expand its manufacturing capabilities. With Apple’s increased reliance on Indian manufacturing partners, such as Pegatron and Wistron, India is fast becoming a key player in Apple’s global production network. The country’s importance is expected to grow even further in the coming years.
7. Direct Employees and Local Vendors
Apple’s move to India is not only boosting production but also benefiting local businesses. Over 40 Indian companies, including Dixon Technologies, Amber Electronics, Wipro, and others, are partnering with Apple for component manufacturing. As a result, India is not only benefiting from direct job creation but also from the growth of its local supplier ecosystem.
Conclusion
Apple’s shift to India for manufacturing reflects a strategic decision to diversify its production base. With the Indian government’s incentives, cost-effective labor, a growing local supplier network, and the disruptions caused by the pandemic in China, India has become an essential manufacturing hub for Apple. As Apple continues to ramp up its production in India, the country is likely to play a central role in the company’s global supply chain in the years to come.
