A $40-bn opportunity for India as Apple dumps China for iPhone production

As Apple plans to source the majority of its iPhones for the US market from Indian manufacturing in the June quarter, experts told Moneycontrol that Foxconn and Tata Electronics plants in India are well-equipped to satisfy demand worth between $12 and $14 billion.

They also anticipate that if this pace continues beyond the June quarter, iPhone manufacturing in India would reach about $40 billion in value in FY26, with roughly 80% of that volume likely going to the US market.

“Over 11 million iPhones were sold in the April-June quarter of 2024 with an average selling price (ASP) of $1,100, which means the value is $12.1 billion. While this remains Apple’s weakest quarter typically, the demand in terms of value will be higher than $12 billion,” an analyst told Moneycontrol on the condition of anonymity.

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With $40 billion in manufacturing, Apple would be able to fulfil 80 percent of its US demand and 100 percent of its domestic demand, which is increasing every quarter.

“The April-June quarter is also on track to be a bumper quarter for Apple in India,” said another analyst, who asked to remain anonymous.

Apple CEO Tim Cook stated that the bulk of iPhones sold in the US during the June quarter will be sourced from India, while practically all iPads, MacBooks, Apple Watches, and AirPods sold in the US will be manufactured in Vietnam.

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Apple intends to relocate a major chunk of India-made iPhones—previously headed for European countries, the UK, Turkey, and Japan—to the United States in the June quarter.  According to industry sources and analysts, Apple is increasing domestic manufacturing to mitigate the effects of escalating US tariffs.

Analysts and industry experts predict that Apple will need to boost the overall value of iPhone manufacturing in India from $22 billion to accomplish its aims. This entails roughly increasing exports from $17.5 billion to $32–35 billion, while the local market is expected to contribute $5–8 billion.

Apple produced around 40-45 million iPhones in India in 2024, accounting for 18-20% of its worldwide output. Around 14-15 million were shipped to the United States, 13 million to other international markets, and approximately 12 million were sold only in India.

According to industry experts, Apple has started sending India-made iPhones to nations such as the Netherlands, Italy, the Czech Republic, Japan, Turkey, the United Kingdom, and the United Arab Emirates.

“Apple will likely reroute India-made iPhones meant for these markets to the US for the June quarter by tweaking the models,” a source said.

Apple’s partners have already increased the capacity of existing Indian plants and established additional units.

Tata Electronics’ new iPhone plant in Hosur has commenced operations, producing older-generation iPhones. Foxconn’s new Bengaluru plant, the second-largest outside China, is being built with a $2.8 billion investment and will shortly begin iPhone manufacturing.  It will have a significant impact on India’s export growth.

According to ICEA statistics, iPhones worth Rs 48,000 crore ($480 million) were exported in the March quarter, compared to Rs 28,500 crore ($285 million) in the same period last year.

In general, the FOB price is the cost of manufacturing and transporting the iPhone until it is ready for export, whereas the final retail price, which can be many times higher, is the cost to the end user.

The FOB price for an iPhone (including assembly and components) might range from $300 to $500, depending on the model and area. However, the final retail price might range from $700 to $1,500, depending on the model and market, representing a markup of 2-3 times the FOB price.

According to S&P Global Market Intelligence, 98% of Apple’s iPhone exports from India in March were bound for the United States, amounting to around 3.1 million handsets, a significant increase from 84% in February.  The majority of March production was handled by Foxconn.