Apple Shifts Gears: India Set to Become iPhone Manufacturing Powerhouse by FY26

New Delhi: Apple is set to ramp up its iPhone manufacturing in India, with plans to produce iPhones worth nearly $40 billion (around Rs 3.36 lakh crore) by the end of FY26. This move is part of Apple’s strategy to diversify its production footprint away from China, driven by ongoing geopolitical tensions and trade tariffs.

The tech giant’s expansion in India aims to meet growing domestic demand and supply 80 percent of the iPhone demand in the US.

Impact of Geopolitical Tensions and Trade Tariffs

Apple’s decision to bolster its India production is a direct response to shifting global trade dynamics. During Apple’s Q2 2025 earnings call, CEO Tim Cook revealed that most of the iPhones sold in the US this June would be made in India. The decision is a result of new US government tariffs tied to the country of origin for imports, making it economically viable for Apple to shift production to India, along with other key manufacturing hubs like Vietnam.

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India as a Key Manufacturing Hub for Apple

This pivot to India is not just limited to meeting US demand. Apple’s investment in India’s manufacturing sector is a significant part of the company’s broader growth strategy. India’s robust manufacturing ecosystem, coupled with the government’s production-linked incentive (PLI) scheme, has contributed to the country’s rise as a critical player in global electronics production.

In FY25, smartphones became India’s largest export category, crossing a record Rs 2 lakh crore. Apple has been the dominant contributor, with iPhones accounting for nearly 70 percent of total smartphone exports. This growth aligns with Apple’s goal of making India a central hub for iPhone manufacturing.

Apple’s Growing Presence in India

In addition to expanding its manufacturing capacity, Apple is also significantly increasing its retail presence in India. The company plans to open more retail stores this year, supplementing the two already operational stores. Apple’s growing investment in India reflects its commitment to the country as a key market and manufacturing base for its global operations.

With a strong performance in India, Apple recently set a quarterly sales record, showcasing the strong demand for its products and services in the Indian market.

As Apple increases its manufacturing footprint in India, the company is positioning itself to capitalize on the rapidly growing smartphone market in India and meet the demands of the US market. This strategic move signals a shift in global supply chains and reinforces India’s position as a key player in the global electronics manufacturing sector.