**London**: In response to rising U.S. tariffs on Chinese imports, Apple Inc. has significantly increased iPhone production in India, aiming to triple its output by 2027. The move leverages lower tariffs and government support, marking a pivotal shift in its global supply chain strategy.
In a strategic move to counter the rising U.S. tariffs on Chinese imports, Apple Inc. has significantly ramped up its iPhone production in India. This decision aligns with the company’s broader aim to mitigate reliance on manufacturing facilities in China, particularly amid intensified trade tensions. Reports indicate that in April 2025, Apple airlifted approximately 1.5 million iPhones from India to the United States, a shipment totalling around 600 tons. This initiative allows Apple to take advantage of India’s comparatively lower tariffs and improved customs processes, thereby maintaining its competitiveness in one of its largest markets.
The context of this transition is rooted in the escalating tariffs introduced by the U.S. government. President Trump’s administration raised tariffs on Chinese imports dramatically, reaching 125% in April 2025, up from 54% earlier in the same year. In contrast, while imports from India faced a 26% tariff initially, this duty was suspended for 90 days beginning on April 9, 2025, as part of a revised reciprocal tariff policy, significantly enhancing India’s attractiveness as a production site.
Apple’s plans for Indian production are ambitious. The company has set a target to manufacture 30 million iPhones in India during 2025, which would represent a doubling of output from the previous year. By 2027, Apple aims to source 25% of its global iPhone production from the country. This strategy is supported by Foxconn, a key manufacturing partner, which operates its Chennai plant even on Sundays to meet the heightened demand.
Foxconn, alongside Tata, currently operates three factories in India, with plans for two additional facilities under construction. In collaboration with Indian authorities, Apple has established a “green corridor” at Chennai Airport to expedite customs clearance, reducing the typical 30-hour process down to just six hours. This governmental support has been pivotal in facilitating Apple’s export aspirations. Additionally, the company’s supplier network in India has expanded to include 14 companies as of 2023, notably featuring Corning, which has launched a display manufacturing site in Tamil Nadu.
The impact of these developments on global supply chains is significant. India currently accounts for 15% of total iPhone production, a substantial increase from nearly zero just a decade ago. By shifting production facilities to India, Apple manages to bypass the hefty 125% tariff imposed on Chinese goods, which poses a threat to the pricing of iPhones in the U.S. market. Furthermore, sales of iPhones in India have started to represent a notable portion of revenues for retail outlets, such as Maxtech in Mumbai, where they contribute 20% to total sales, up from negligible levels prior to the expansion.
However, Apple faces several challenges as it pursues this aggressive growth strategy in India. Despite the increased local production, iPhones still hold just a 25% share of the Indian smartphone market due to their high prices, although the local manufacturing could potentially help lower consumer costs. Additionally, while the suspension of the 26% tariff is beneficial, it poses a risk, as this rate remains higher than previous standards when fully enforced. Apple is actively lobbying for adjustments to these duties to further bolster its foothold in the Indian market.
In summary, Apple’s expansion into India signifies a major shift in its global supply chain strategy, prompted by rising tariffs on Chinese imports. With robust government support and a growing manufacturing base, India is emerging as a critical hub for Apple’s operational ambitions. However, the company must navigate ongoing challenges related to cost, market demand, and geopolitical risks as it adapts to the evolving landscape of international trade and commerce.
Source: Noah Wire Services
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