Apple should remain confident about Make in India, say analysts

File Photo: An Apple store in the Brooklyn borough of New York, US, on Friday, May 23, 2025.
| Photo Credit:
YUKI IWAMURA

India remains Apple’s most viable option to ramp up manufacture of its iPhones despite the increasing pressure from President Donald Trump to shift production to the US, according to analysts. The Financial Times recently reported that Foxconn was investing $1.5 billion in a new component factory near Chennai, close to its existing assembly unit.

Subhendu Pattnaik, Chief Marketing Officer, Covasant, said that while higher tariffs may be a challenge, Apple is still keen on its plans to expand in India. During the latest quarterly result, Apple’s CEO Tim Cook had confirmed that majority of the iPhones sold in the US will be sourced from India.

“I don’t think Apple views India as just a cost saver option but more to achieve scale and reduce dependency on China. If we look at India as a market, competitiveness of phones may come down, but Apple will continue to invest in India if they are looking at speed and scale of production,” said Pattnaik.

According to Upasana Joshi, Senior Research Manager, Devices Research, IDC Asia Pacific, India has evolved as a preferred manufacturing destination after China.

“It’s been more than a decade of local production of smartphones in India, while iPhone manufacturing started in 2017 scaling up from SKD to CKD type over the years. India is placed strategically and cannot be ignored due to availability of skilled labour at an effective cost, plethora of contract manufacturers constantly scaling up assembly lines and attractive government schemes like PLIs to incentivise manufacturers,” she said.

While USA is among the top three countries in terms of smartphone shipments, Joshi said Apple’s dependency on countries like India and China will remain at least for initial years, till USA scales up local production.

Meanwhile, Shubham Singh, Counterpoint research analyst, said Trump’s warning appears to be a negotiation tactic likely intended to give the US government greater leverage in reducing tariffs on export products. Further, shifting an established supply chain is a complex process, building the entire supporting ecosystem takes lot of time, he said. Singh added that companies like Foxconn shouldn’t be too worried about their investment in India.

“Expanding in India makes sense, it helps Apple move away from relying on China so much, and they’re getting solid support through India’s PLI incentives. Even with the U.S. tariff noise, building at scale in India is far more practical and affordable than shifting everything to the US right now,” said Singh

Similarly, on Trump’s push to build in the US instead of India, Ashutosh Sharma, Vice President and Research Director at Forrester, pointed out that that the US doesn’t have the required skills at scale to manufacture domestically.

“Manufacturing is hard, especially something like an iPhone which requires a combination of both manual and automated processes. China has mastered this art. India which joined this race a bit late has developed formidable expertise in last 11 years plus it has the labor advantage which other countries such as the USA do not have,” said Sharma.

As for the 25 per cent tariff threat, the analyst said India will still remain a cost competitive alternative to manufacture iPhones rather than the US. Apple primarily has three options for manufacturing: China, Vietnam and India.

“China is likely to have a more difficult environment because of the high tariffs. Same is the situation with Vietnam. So, it’s left with primarily India as the most viable location for manufacturing at least for now,” said Sharma, adding that he expected Trump to even roll back on his threat considering the many other flip-flops made by the administration.