Apple’s growing manufacturing footprint in India marks one of the most significant developments in the country’s high-tech industrial landscape and aligns closely with the government’s ambition of positioning India as a global electronics hub.

According to a recent report citing Grant Thornton Bharat, Apple’s decision to manufacture its entire iPhone 17 series in India is not just a symbolic shift but a structural move designed to streamline supply chains, reduce tax outflows, and tap into policy incentives while creating substantial direct and indirect employment opportunities.

By anchoring segments of its global production in India, Apple strengthens India’s credibility as a premium device manufacturing destination and moves further along in diversifying away from its traditional reliance on China.

A major driver behind this shift is the avoidance of the 20 per cent Basic Customs Duty (BCD) imposed on imported, fully assembled devices.

By producing in Tamil Nadu and Karnataka through its contract manufacturers—Foxconn and Tata Electronics—Apple saves significant duties, thereby improving cost efficiency. Local manufacturing also acts as a buffer against future uncertainties of tariff escalation in key markets like the United States.

While smartphones are currently exempt from heightened US duties, other Indian exports already face tariffs as high as 50 per cent, highlighting the strategic importance of localised production to shield Apple from trade disputes and regulatory headwinds.

India’s Production Linked Incentive (PLI) scheme adds a further layer of strategic advantage. The scheme provides 4–6 per cent cash incentives on incremental mobile phone sales manufactured in India over five years. This policy instrument not only makes Indian assembly more financially attractive but has already contributed to measurable export gains.

Apple’s contract manufacturing ecosystem in India has benefited handsomely, with iPhone exports surpassing $10 billion in FY 2024–25. In H1 2025 alone, exports rose 53 per cent year-on-year to 23.9 million units, underlining how India has matured into a significant node in Apple’s global production and logistics chain.

What is notable is that a large share—78 per cent of iPhones assembled in India during this period—was shipped to the US, up from 53 per cent the previous year. This trend underscores both Apple’s operational reliance on Indian facilities and the country’s emergence as a reliable source of premium electronics for developed markets.

The employment and industrial ecosystem impacts are also wide-ranging. Localised production translates into thousands of new jobs, with spillover benefits across the component supply chain, logistics, and ancillary industries. State governments have acted swiftly to create conducive investment climates.

Tamil Nadu has provided capital subsidies, expedited environmental clearances, and earmarked dedicated electronics parks to support large-scale assembly operations.

Karnataka, meanwhile, has offered land at concessional rates, rebates on electricity tariffs, and targeted skill development funds to create a trained workforce capable of supporting high-quality electronics production. Together, these measures strengthen manufacturing ecosystems in both states, setting the stage for long-term investments in advanced manufacturing.

Despite the sizeable gains in exports and ecosystem growth, immediate price reductions for Indian consumers may not materialise. The cost benefits that Apple accrues are largely offset by supply chain integration, compliance overheads, and the long-term capital-intensive nature of the electronics sector.

Experts, including Grant Thornton Bharat’s Krishan Arora, note that Apple’s India strategy is driven less by short-term consumer pricing considerations and more by long-term structural strength: insulating itself from tariffs, stabilising supply chains, and leveraging government incentives to scale production.

In sum, Apple’s full-scale iPhone 17 manufacturing shift into India reflects a confluence of economic strategy, policy support, and geopolitical trade dynamics.

It enhances India’s reputation as a high-value production centre, catalyses employment generation, and boosts large-scale exports, all while plugging tax leakage that would otherwise accrue on imported devices.

The decision also reflects a broader reorientation of global supply chains, with multinational technology companies increasingly looking at India as both a resilience-building alternative to China and a long-term partner in the manufacturing of advanced technological products.

Based On IANS Report