Apple's India play explained: From a small assembly base to a global iPhone manufacturing hub creating over 200,000 jobs

India's push to become a global electronics manufacturing hub is beginning to pay off, with Apple now making millions of iPhones in the country, creating more than 200,000 jobs and steadily reducing its dependence on China.

What started as a small manufacturing experiment has grown into one of Apple's biggest production bases, driven by government incentives, geopolitical shifts and a rapidly expanding supplier network.

At the heart of this transformation are massive iPhone factories in Tamil Nadu and Karnataka.

Foxconn's 160-acre facility near Chennai employs around 40,000 workers across three shifts, while another iPhone assembly plant operated by Pegatron, now controlled by the Tata Group, employs about 10,000 people, most of them women, according to a report by Bloomberg.

Together with newer facilities, these factories have helped India emerge as one of Apple's fastest-growing manufacturing destinations.

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India's manufacturing push began in 2019

India's electronics manufacturing push gathered pace soon after Prime Minister Narendra Modi returned to power in 2019.

At the time, Apple was becoming increasingly concerned about its heavy dependence on China amid rising US-China trade tensions. While the company had already started assembling a small number of iPhones in India, expanding production remained expensive.

A study commissioned by the India Cellular & Electronics Association found that a phone costing $100 to manufacture in India would cost only $81 to $83 in China because of its well-developed supply chain and production scale. Manufacturing the same phone in Vietnam would cost $87 to $89.

Despite these challenges, Indian officials believed global companies were actively looking for alternatives to China.

"As you are aware, a golden opportunity has come knocking at our doors," Nripendra Misra, then principal secretary to the prime minister, wrote to Amitabh Kant shortly after a meeting with technology companies, including Apple.

"It is, therefore, requested that an enabling policy framework to seize this opportunity may kindly be designed in consultation with stakeholders."

₹410 billion incentives changed the game

A few months later, the government approved ₹410 billion ($4.3 billion) in production-linked incentives (PLI) for mobile phone manufacturing over five years.

The scheme rewarded companies that met investment and production targets, especially for premium smartphones priced above ₹15,000.

The timing proved crucial. Soon after, the Covid-19 pandemic disrupted Apple's operations in China, strengthening the company's plans to diversify manufacturing.

India is now making all iPhone 17 models

India produced around 55 million iPhones in the 12 months ended March. For the first time, the country is manufacturing all four iPhone 17 models during their initial launch period.

The world's second-largest iPhone factory by area is now located near Bengaluru, where nearly 30,000 workers assemble Apple's latest smartphones.

Apple's supplier network is expanding rapidly

Apple's manufacturing expansion has encouraged dozens of suppliers to invest in India.

More than 40 companies now produce Apple components locally. These include Salcomp, which makes chargers, heat sinks and induction coils; Amperex Technology, which manufactures lithium-ion cells; Tata, which produces the iPhone's metal chassis; Jabil, which makes AirPods plastic shells; and Aequs Ltd., which manufactures MacBook and Apple Watch enclosures.

Indian companies including Bharat Forge, SFO Technologies, Tata, VVDN Technologies and Wipro Pari are also benefiting from ₹400 billion in government incentives aimed at electronics component manufacturing.

Even some of the machines used to manufacture iPhone parts are now being built in India, marking another step in strengthening the country's electronics ecosystem.

Electronics have become India's third-largest export

Electronics are now India's third-largest export category after engineering goods and petroleum products.

In July, the government announced another ₹625 billion in incentives to deepen electronics manufacturing and encourage more local production of components. Although the subsidies are not exclusively meant for Apple, the company is expected to be among the biggest beneficiaries.

India produced more than $25 billion worth of iPhones in the fiscal year ended March, with almost 80% exported, mainly to the US. Apple also exports AirPods made in India.

Without India's production capacity, Apple would likely have had to increase prices to offset tariffs imposed on Chinese-made products shipped to the US.

China is trying to protect its manufacturing lead

Despite the progress, India still faces several hurdles.

China continues to dominate Apple's supply chain with its mature manufacturing ecosystem, large industrial parks and extensive supplier base.

Apple's largest manufacturing complex remains Foxconn's "iPhone City" in Zhengzhou, China, which employs around 200,000 workers.

China has also begun tightening restrictions on technology transfers and skilled workers.

In 2025, Foxconn recalled hundreds of Chinese engineers and technicians working at Indian iPhone factories, forcing Apple to bring in specialists from the US, Japan, Korea and Taiwan.

"China's current posture will raise the degree of difficulty for New Delhi's industrial ambitions," said Reema Bhattacharya, head of Asia risk insight at advisory firm Verisk Maplecroft.

"Restrictions on specialised equipment, skilled personnel and manufacturing know-how are unlikely to stop diversification altogether. But they can slow timelines, raise costs, and reduce efficiency, making the transition more complex and management intensive."

India still faces cost and infrastructure challenges

India continues to face infrastructure and cost challenges. The country still imports many components, while its tax structure increases production costs compared with China.

However, Apple's investment has already transformed India's manufacturing landscape.

The company recorded more than $10 billion in annual sales in India during the fiscal year ended March 2026, a 25% increase from two years earlier. Around 10% of smartphones sold in India are now iPhones, compared with just 1.5% of the market a decade ago.

Beyond manufacturing, Apple's India teams now also work on software engineering, customer support, marketing and improving Apple Maps.

Apple's expansion is creating jobs and changing lives

For the Modi government, the gains extend beyond exports.

Five iPhone factories across India now employ more than 200,000 workers, while hundreds of thousands of additional jobs have been created indirectly through the supply chain.

Many of these jobs have gone to young women from economically weaker backgrounds.

Kerthika, 25, who worked for an Apple supplier, said the job helped her become financially independent.

"I made 18,000 rupees a month, and sent most of it to my old parents in the village," she said.

"I don't know what I would have done without this job."

Her friend Prithi, 24, who works on an iPhone assembly line, said her salary helped her family repay debt.

"I helped pay off a loan for my parents, thanks to my stable income," she said.

"Someday, maybe, I too can save enough to buy an iPhone."