The Apple Effect: India’s emergence as a mobile phone hub has been nudged along by Apple’s ecosystem

The line 'Designed by Apple in California, Assembled in China' that appeared on the iPhone packaging for years has been joimed by Designed by Apple in California, Made in India.

The change in text is an affirmation as much of Apple’s rapid growth in India as the country’s own emergence as a mobile-phone manufacturing powerhouse.

Apple, based in Cupertino in Silicon Valley, has taken less than 10 years to stamp its presence in India. It commenced manufacturing iPhones in India in 2017, when Taiwan-based contract manufacturer Wistron started assembling the low-cost iPhone SE locally.

And it made a technological leap in 2024 when it started producing the top-tier Pro Max model in India. Just a year later, India had become so central to Apple’s supply chain that it airlifted 1.5 million iPhones, weighing 600 tonnes, from India to the US to front-run import tariffs imposed by President Donald Trump.

“Apple has played a pivotal role in accelerating India’s electronics manufacturing ecosystem. Its expansion has attracted suppliers, strengthened local manufacturing capabilities and improved quality standards,” says Prachir Singh, Senior Research Analyst at Counterpoint Research.

”Apple's growing exports have also enhanced India’s credibility as a global manufacturing destination, encouraging more multinational companies to consider India as part of their supply-chain diversification strategy,” he adds.

Apple’s rapid growth was aided at least in part by Indian policy support. Apple did not respond to requests for comment for this story.

The Era of Imports

Until 2014, most domestic brands were sourcing handsets from China. Chinese smartphone makers too were expanding aggressively in the Indian market. “In 2014–15, about 80% of the Indian smartphone market was fed by imported products,” recalls Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA).

For the world's third-largest smartphone market at the time, continuing on this path meant an ever-expanding import bill.

Policymakers recognised that if India wanted to become a global manufacturing powerhouse, electronics, mobile phones in particular, had to be the starting point. They also knew they could not replicate China's ecosystem overnight.

After all, China had spent decades building an integrated network of component suppliers, contract manufacturers, logistics networks and semiconductor facilities. India chose a different strategy: building the ecosystem one layer at a time.

Creating An Ecosystem

“When you create an ecosystem, then it starts with multiple layers. For instance (in electronics manufacturing), you first start with assembly, then you get into manufacturing, and then you start getting into the components, and then the design will come,” says Rahul Sharma, co-founder of Bhagwati Products Ltd, an electronics contract manufacturer.

In FY15, India introduced a differential duty structure to encourage domestic assembly and discourage import of Completely Built Units (CBUs). As a result, some 37 companies started smartphone assembly in India before mid-2016.

“We first instituted the differential duty, which kicked in during 2015. There was a differential of about 11% between imports and domestic assembly,” says Mohindroo.

Then came the Phased Manufacturing Programme (PMP) in 2017, which aimed to drive component localisation starting with basic, easily reproducible accessories. Import duties were gradually levied on key parts such as phone chargers, batteries, cables, mechanical housings and other sub-assemblies, incentivising suppliers to manufacture locally rather than ship finished components from China.

Domestic value addition in smartphones assembled in India grew from a mere 2–5% in 2014 (simple assembly) to roughly 15–20% by 2020.

Next, the government pivoted to the Production-Linked Incentive (PLI) scheme Large Scale Electronics Manufacturing in 2020, shifting its sights from local assembly to rewarding companies for incremental production and high-volume exports.

Payback

This strategy has delivered dramatic results. Consider these facts.

Electronics production increased from Rs 1.9 lakh crore in FY15 to Rs 11.3 lakh crore in FY25. Mobile phone production surged from about Rs 18,000 crore in FY15 to Rs 5.45 lakh crore in FY25. Smartphone exports crossed Rs 2 lakh crore in FY25, making them one of India's largest export categories.

India is today the world's second-largest mobile phone manufacturer, with Apple and South Korea’s Samsung using the country as a major global production base.

“Between 2019 and 2025, India smartphone export shipments registered a CAGR (Compound Annual Growth Rate) of 17%. During the same period, iPhone exports from India recorded a CAGR of over 90%, reflecting a significant scale-up in Apple's manufacturing and export operations in the country,” says Prachir Singh. “Apple and Samsung already had global supply chains and export networks, allowing them to scale manufacturing quickly under the PLI scheme.”

Next Bottleneck

Triggered by the need to de-risk its supply chains during the pandemic and aided by the PLI scheme, Apple aggressively scaled its local operations alongside Foxconn, or Hon Hai Technology Group.

Apple may have relied on Taiwanese contract manufacturers like Foxconn, Pegatron and Wistron, but its approach stood out for a structured effort to build a local supply chain.

While Samsung relied on its established Korean vendors and and Chinese smartphone players on Chinese Original Equipment Manufacturers’ domestic suppliers, Apple actively cultivated homegrown Indian companies, integrating Bharat Forge, Hindalco and Wipro PARI to name a few into its core manufacturing ecosystem.

After the PLI scheme for large-scale electronics wrapped up on March 31, 2026, policymakers addressed the next bottleneck: components. The thinking was that if India is to become a global manufacturing powerhouse, it must manufacture high-value components at home rather than rely on imports.

This strategic shift led to the Electronics Components Manufacturing Scheme (ECMS), designed to deepen the supply chain by supporting local production of printed circuit boards, camera modules, connectors, passive components, electromechanical parts, sub-assemblies, and capital equipment.

“The domestic value addition during the PMP (Phased Manufacturing Programme) programme introduced in 2017 was between 9 and 14%, but under ECMS, the target is to achieve between 40 and 50% value addition,” Sharma of Bhagwati Products says.

Building Local Brands

Remember, the smartphone supply chain Apple established in China ultimately enabled domestic players/companies/start-ups to launch their own world-class brands. Through ECMS and MPMS, India is poised to develop a similar foundation to nurture home-grown brands.

The shifting supply chain is encouraging primary component suppliers such as producers of displays, memory devices and camera modules to establish local operations. For companies planning to build proprietary devices, this reduces reliance on foreign suppliers.

The incentives the government has offered and continues to offer aren’t just handouts. They are a deliberate countermeasure to India's cost handicap against China.

Even today, standard manufacturers face an 8 to 10% cost disadvantage while the precision engineering demanded by Apple’s top-tier devices pushes that deficit to 10 to 13%, a gap the two latest schemes aim to bridge.

With India targeting $500 billion in annual electronics production by 2030 and setting a longer-term ambition of $5.3 to $8 trillion by 2047, the trajectory is clear.Industry executives believe that reaching the 2030 milestone over the coming years will allow India to shed its image as a fallback option to China and establish itself as a primary, globally competitive manufacturing hub.

The ultimate goal extends far beyond smartphones, which may well be replaced by entirely new technological form factors by 2047.