File photo: Apple Store in Brooklyn Autonomous Borough, New York, USA on Friday, May 23, 2025. | Photo Credit: Yuki Iwamura
India remains Apple’s most viable option to bolster iPhone manufacturing, despite growing pressure from President Donald Trump to move production to the US, according to analysts. Financial Times Recently, Foxconn reported that it has invested $1.5 billion in a new component factory near Chennai, close to existing assembly units.
Covasant’s chief marketing officer, Subhendu Pattnaik, said higher tariffs could be a challenge, but Apple is still keen on expanding plans in India. During the latest quarter results, Apple CEO Tim Cook had confirmed that the majority of iPhones sold in the US will be sourced from India.
“I don’t think Apple sees India as just a cost-saver option, but in order to achieve scale and reduce dependence on China, seeing India as a market could reduce the competitiveness of phones, but Apple will continue to invest in India if they look at the speed and scale of production,” Pattnaik said.
India has evolved as a preferred post-China manufacturing destination, according to Upasana Joshi, senior research manager at Devices Research, IDC Asia Pacific.
“While local production of smartphones in India has been around for over a decade, iPhone manufacturing has been scaled up from SKD to CKD type in 2017. India is strategically placed, with the availability of skilled workers at effective costs, a large number of contract manufacturers expanding assembly lines and expanding attractive government schemes, so it cannot be ignored.
The US is one of the top three countries when it comes to shipping smartphones, but Joshi said Apple’s dependence on countries like India and China will last for at least the first few years until the US expands local production.
Meanwhile, Counterpoint research analyst Shabam Singh said Trump’s warning was a negotiation tactic aimed at giving the US government greater leverage to reduce tariffs on exported products. Furthermore, shifting established supply chains is a complex process and it takes a lot of time to build an entire support ecosystem, he said. Singh added that companies like Foxconn should not be too concerned about their investment in India.
“Expansion in India makes sense, it helps Apple move away from its reliance on China, and they have gained solid support through India’s PLI incentives.
Similarly, as Trump is pushing for the US to replace India, Forester’s vice president and research director Ashutosh Sharma noted that the US does not have the skills necessary for domestic manufacturing on a scale.
“It’s difficult to manufacture, especially like an iPhone that requires a combination of both manual and automated processes. China has mastered this art. India, who took part in this race, has developed formidable expertise over the past 11 years.
Regarding the 25% tariff threat, analysts said India is still a cost-competitive alternative to manufacturing iPhones rather than the US. Apple has three main manufacturing options: China, Vietnam and India.
“The high tariffs make China likely to create a more challenging environment. The situation in Vietnam is the same. So, at least for now, India remains primarily the most viable place for production,” Sharma said.
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Released on May 25, 2025
