Apple’s iPhone exports from India grow as part of global supply chain shift

In a significant shift in its global supply strategy, Apple has increased iPhone exports from India by 33% in the first half of the fiscal year, reaching nearly $6 billion by September 2024. The tech giant aims to surpass its yearly target of $10 billion in exports from India by the end of the fiscal year, signaling a deeper commitment to reducing its reliance on China as a manufacturing hub.

Boosted Production and Exports from India

Apple’s decision to expand manufacturing in India has led to a steady rise in export volume, thanks to various strategic benefits. India’s local subsidies, an expanding talent pool, and improving tech infrastructure have enabled Apple to streamline production. Currently, Apple’s primary suppliers in India include Foxconn, Pegatron, and Tata Electronics, each playing an essential role in boosting production capacity.

Foxconn, the largest contributor, operates from its Chennai facility, accounting for about half of Apple’s exports from India. Tata Electronics has also become a significant player after taking over Wistron’s manufacturing operations, exporting nearly $1.7 billion in iPhones from its Karnataka plant in just six months.

Rising iPhone Exports and Economic Impact on India

This increased production has contributed significantly to India’s overall export economy. iPhones and other smartphones are now India’s top export to the U.S., bringing in around $2.88 billion in the first five months of the fiscal year. This marks a remarkable rise from five years ago, when smartphone exports to the U.S. were valued at just $5.2 million annually.

Apple’s Retail Expansion in India

Apple has also invested in expanding its retail footprint in India, opening flagship stores in Mumbai and New Delhi. These stores have added to Apple’s growing revenue in the region, which hit a record $8 billion by the end of March 2024. The success of these retail outlets underscores Apple’s broader strategy to strengthen its brand presence and customer engagement in the Indian market, which has long been a focal point for growth.

Strategic Shift to Reduce Dependence on China

Apple’s manufacturing push in India reflects its broader efforts to diversify its supply chain amidst global tensions and evolving economic challenges. While China remains Apple’s central manufacturing base, with strong research and development capabilities, recent trade tensions and geopolitical issues have driven the company to explore other manufacturing hubs like India.

This gradual shift allows Apple to build more resilience into its supply chain while reducing risks associated with over-dependence on any single country. By manufacturing the latest iPhone 15 Pro models in India, Apple is solidifying India’s role as a key player in its production network.

Future Prospects

Apple’s commitment to scaling up in India marks a critical evolution in its global strategy, aiming to balance its production needs with market expansion. India’s growing manufacturing role not only benefits Apple but also reinforces India’s position in the global tech supply chain. With ambitious export targets and expanding operations, Apple is set to leverage India’s potential as a major manufacturing and export hub in the coming years.