Apple confirms ‘majority’ of iPhones sold in US will come from India in near term

This is a near-term confirmation for Apple’s increasing reliance on India, as China gets hit with the hardest tariff rates from the US. While the iPhone maker saw only “limited impact” from tariffs in the March quarter, Cook said Apple couldn’t forecast beyond that. However, if things remained the same, the company estimates tariffs will add $900 million to its costs in Q3, much lower than initially anticipated.

Apple was caught in the crosshairs of the retaliatory tariff action by US President Donald Trump last month, where China was among the worst hit. While there have been some concessions along the way, such as the US administration exempting smartphones and computers from many of the levies, there is fear that the categories could see fresh tariffs in the future, something that Trump has hinted at.

India received a relatively much lower tariff rate, and was also among the countries where the US paused retaliatory tariffs for 90 days. Making and exporting from India, therefore, could be a more cost-effective proposition for Apple.

Apple’s gradual ramp up in India, tariff push

Apple sells more than 60 million iPhones in the US a year, and in the last fiscal, it produced a total of $22 billion worth of iPhones in India, which is around 20 per cent of its global production capacity. Of this production, it exported iPhones worth around $18 billion from India.

Apple doubled down on production in India in 2020, after the Indian government announced its production linked incentive (PLI) scheme for smartphone manufacturing, under which it was to subsidise manufacturers depending on the amount of their incremental sales. While the company started by making some of its older iPhones in India, today it produces all models, including the higher-end Pro range for global consumption.

Apple, through its contract manufacturers, has been the biggest beneficiary of the scheme, which has helped it move some production away from China. The company started with three contract manufacturers here – Foxconn, Wistron and Pegatron – and the latter two have now been acquired by the Tata Group.

There are some challenges though. As of Apple’s latest official list of suppliers, in 2023,  as many as 157 of the company’s various vendors and suppliers manufactured in mainland China, up from 151 the previous year. The number of Indian suppliers was 14. As per people in the know, that has now gone up to 64 suppliers in the country, marking a slow but gradual movement of much of its supplier base to India as well.

Apple: the key beneficiary of Indian subsidies

Apple and its manufacturing partners have been the biggest beneficiaries of subsidies under the PLI scheme for smartphones. The Indian Express had earlier reported that, under the scheme, the government has disbursed close to $1 billion in the three years from 2022-23 to 2024-25, with the three contract manufacturers of Apple receiving cumulatively over 75 per cent of the amount.

Apple’s contract manufacturers, Foxconn, Tata Electronics and Pegatron (which was recently acquired by the Tatas), have received a total of almost Rs 6,600 crore over three years — 2022-23 and 2024-25.

In 2023-24, Foxconn, which is Apple’s biggest contract manufacturer globally, received a subsidy disbursal of Rs 2,450 crore, the highest during the year. However, in 2024-25, the data showed no incentive was issued to Foxconn. In 2024-25, Samsung received the highest subsidy of close to Rs 958 crore.