Driven by global supply chain realignment and geopolitical tensions, Apple is rapidly advancing its “China+1” manufacturing strategy. According to Bloomberg, citing sources familiar with the matter, the company assembled approximately 55 million iPhones in India in 2025—up 53% from 36 million units the previous year—accounting for roughly one-quarter of its estimated global production of 220–230 million units. This marks a record high and solidifies India’s position as Apple’s second-largest manufacturing hub, reflecting the tech giant’s risk-mitigation calculus amid rising trade protectionism.
India’s explosive manufacturing growth stems directly from a sharp shift in U.S. trade policy toward China. In 2025, the U.S. government imposed steep new tariffs on Chinese goods as part of the ongoing U.S.-China trade conflict, significantly eroding the price competitiveness of iPhones made in China. To circumvent these tariff barriers, Apple and its suppliers were forced to urgently relocate production destined for the U.S. market to third countries.
“Tariffs have become the strongest catalyst reshaping the global electronics manufacturing landscape,” said a supply chain analyst. “Apple must now strike a new balance between political risk and production costs.”
Prime Minister Narendra Modi’s Production-Linked Incentive (PLI) scheme, launched in 2014, is now bearing fruit. The program offers generous subsidies to attract multinational corporations to shift capacity to India, aiming to transform the world’s most populous nation into the next “world factory.” For Apple, these incentives have effectively offset India’s structural weaknesses in supply chain maturity and logistics efficiency.
Apple is now deepening collaboration with local Indian suppliers, expanding beyond final assembly to include key components such as lithium-ion batteries, Apple Watch casings, smartphone enclosures, and AirPods—signaling steadily increasing localization.
Challenges Remain: Cost Gaps and Policy Uncertainty
Despite rapid growth, India’s manufacturing sector still faces significant bottlenecks. Sources indicate that assembly and component production costs in India remain substantially higher than in China and Vietnam, compelling giants like Apple and Samsung to continuously seek additional government support.
Urgency is mounting: India’s current smartphone production subsidies expire on March 31, while the U.S. Supreme Court recently overturned certain China-related tariffs. This narrowing policy window is pressuring New Delhi. Reports say manufacturers are in urgent talks with the Indian government over a new round of export-linked incentives to preserve India’s cost competitiveness. An Apple spokesperson declined to comment on the matter.
[Analysis] The jump in India’s iPhone output—from 36 million to 55 million units—is more than just a numerical increase; it epitomizes the broader shift in global tech supply chains from an “efficiency-first” to a “resilience-first” paradigm. Against the backdrop of entrenched U.S.-China strategic competition, India’s rise may be only the beginning—but whether it can truly challenge China’s manufacturing dominance hinges on its ability to bridge gaps in infrastructure, skilled labor, and supply chain ecosystems.
