ArticlesApple Inc Shifts iPhone Manufacturing from China to India

Taral Nagar

Apple Inc Shifts iPhone Manufacturing from China to India

As global faith in China’s supply chain fades, Apple has taken steps to begin high-volume manufacturing iPhones in India. Trade and Industry Minister, Piysuh Goyal aims to undertake 20% of all iPhone manufacturing and assembly in India by 2026.

By India Index

4 min read

Apple Inc, a global technology giant renowned for its consumer electronics, software, and online services, has seen unprecedented success with its flagship product, the iPhone, over the past decade.

For years, China served as the primary manufacturing hub for Apple's iPhones. However, the Covid-19 pandemic exposed the risks associated with relying solely on a single manufacturing base. China's strict preventive policies severely hampered its factory operations, particularly with large-scale testing and isolation mandates implemented in 2020.

Initially, these measures disrupted factory operations, particularly during the winter Lunar New Year when factory workers traditionally returned home. Lockdowns prevented workers from resuming their jobs, causing a significant slowdown in manufacturing and leading to concerns among global businesses about the reliability of Chinese exports. Consequently, Apple's contract manufacturers began exploring alternative manufacturing locations, with India emerging as a promising option due to its lower labor costs compared to China.

Despite China's evolving Covid-19 measures, the country's manufacturing infrastructure remained unchanged. The shift to the 'Living with COVID' policy in 2022, coupled with the emergence of the highly contagious omicron variant, led to a resurgence of illnesses and localized lockdowns. This further exacerbated disruptions in manufacturing, with incidents like the worker revolt at Foxconn's iPhone base in Zhenzhou prompting a strategic shift in manufacturing to India.

As a result, India witnessed a significant increase in iPhone exports, reaching $2.5 billion between April and November 2022. Apple's CEO, Tim Cook, highlighted the company's record-breaking revenue in various regions, emphasizing the strong growth in emerging markets like India.

Under the guidance of Piyush Goyal, India's Trade and Industry Minister, Apple aims to manufacture 20% of all iPhones in India by March 2026. Additionally, Pegatron, a Taiwanese contract manufacturer, announced plans to produce iPhone 14 headsets in India.

However, the transition from China to India presents its own set of challenges. India's infrastructure and manufacturing capabilities are still developing, and disruptions in global supply chains have made it challenging to secure the necessary components for assembly. To address these challenges, Finance Minister Nirmala Sitharaman proposed relief in customs duties for importing components in the 2023 budget, aiming to encourage domestic value addition in mobile phone manufacturing.

Despite these challenges, Apple's investment in India is expected to have a positive impact, creating jobs, boosting the economy, and attracting other foreign businesses. This positions India as a promising hub for global manufacturing in the years to come.

💡 Want to use automation for your teams?

Was this article helpful? 💡

Share this article