Apple Inc. (AAPL) shares made gains on Wednesday as news broke that India’s iPhone exports soared to a record US$23 billion in 2025. This significant milestone highlights the country’s emergence as a vital player in Apple’s global supply chain, especially as the tech giant diversifies production away from China.
According to government statistics, overall smartphone exports from India jumped an impressive 47% over the past year, rising from US$20.4 billion in 2024. Apple played a dominant role, accounting for approximately 76% of that growth, driven by strategic production-linked incentives and the ramping up of local manufacturing capabilities.
Currently, Apple operates five iPhone production facilities in India, supported by a robust supply chain consisting of around 45 partner companies, including numerous small and medium enterprises. These factories primarily focus on assembling mid-tier iPhone models, while premium versions, such as the Pro line, continue to be assembled in China due to infrastructure and component constraints.
India Emerges as a Crucial Supplier
In the second quarter of 2025, India claimed nearly 44% of US smartphone imports, a dramatic increase from just 13% the previous year, as China’s share plummeted from 61% to 25%. This shift underscores Apple’s ongoing efforts to mitigate geopolitical risks and supply chain disruptions by relocating a larger portion of its US-bound production to India.
India’s production-linked incentive (PLI) scheme, initiated in March 2025, ties government subsidies to production volumes and encourages higher domestic value-addition. The initiative aims to increase local component manufacturing from approximately 18-20% to over 35%, facilitating India’s transition from basic assembly work to a more sophisticated manufacturing ecosystem. Apple’s expansion in the region aligns closely with these government-supported objectives.
Tariffs on the Horizon
Despite the strong upward trajectory of exports, challenges loom on the horizon. New U.S. tariffs now impose a 26% duty on electronics from India, up from zero, which compels Apple to evaluate the potential for raising consumer prices. Analysts predict that if tariffs are maintained, consumers could see iPhone prices rise by as much as 18%.
Compounding this challenge, India’s relatively limited local component production could hinder continued growth, especially for high-end models that rely on more complex and sophisticated components.
A Broader Strategy: Diversifying Beyond China
Apple’s pivot towards India is part of a larger strategy aimed at diversifying its supply chain. While India plays an increasingly vital role in supplying the U.S. market, China remains predominant in global production outside of North America. Industry experts suggest that India’s current focus on mid-tier devices is largely due to both infrastructural realities and the early-stage development of its local component ecosystem.
The robust export numbers emerging from India signal a pivotal moment for Apple and signify the maturation of the country’s electronics industry. Investors appeared to respond positively to these developments, with a slight uptick in Apple shares early in the trading session as the market absorbed the implications for supply chains, pricing, and Apple’s competitive positioning in global markets.
As the dynamics of international supply chains continue to evolve, Apple’s strategies underscore the importance of adapting to geopolitical realities while harnessing the opportunity presented by India’s burgeoning manufacturing capabilities.
