Apple is accelerating its strategy to produce the majority of iPhones sold in the United States at facilities in India by the end of 2026. This move comes as the company anticipates the possibility of increased tariffs on imports from China, which remains its primary manufacturing base, according to a source who spoke to Reuters on condition of anonymity due to the confidentiality of the planning process.
To realize this ambitious objective, Apple is engaged in urgent discussions with its major contract manufacturers Foxconn and Tata. These talks are part of a broader effort to shift a significant portion of its supply chain out of China and into India. “The U.S. tech giant is holding urgent talks with contract manufacturers Foxconn and Tata to achieve that goal,” the source told Reuters.
Requests for comments from Apple and Foxconn went unanswered, while Tata declined to provide any statement on the matter.
Apple currently sells over 60 million iPhones in the U.S. each year, with approximately 80 percent of those devices still being manufactured in China. The company’s latest plans suggest a substantial shift in global production lines, with India poised to play a pivotal role in Apple’s long-term strategy.
India’s Prime Minister Narendra Modi has actively promoted the country as a global hub for smartphone manufacturing in recent years. However, higher import duties on mobile phone components compared to many other nations continue to make local production a costly affair for manufacturers.
The Reuters source highlighted the financial challenge Apple faces, noting that “for iPhones, manufacturing costs in India are 5-8% higher than in China, with the difference rising to as much as 10% in some cases.” These increased costs are largely due to India’s tariff structure, which imposes heavier duties on imported parts used in smartphone production.
Despite these economic hurdles, Apple has significantly boosted its manufacturing footprint in India in response to tariffs that were introduced under U.S. President Donald Trump’s administration. In March, the company shipped about 600 tons of iPhones worth $2 billion from India to the United States. This shipment represented a new record for both Tata and Foxconn, Apple’s major contractors operating in India. Foxconn alone accounted for smartphone shipments valued at $1.3 billion, according to a previous report by Reuters.
These moves are part of a larger strategy by Apple to insulate itself from the risks associated with geopolitical tensions and trade disputes between the U.S. and China. In April, the United States imposed 26 percent tariffs on imports from India, which were significantly lower than the over 100 percent duties levied on imports from China at the same time. While Washington has paused most import duties for a three-month period, the exception remains in place for Chinese goods.
The trade policies that emerged during Trump’s presidency, including high tariffs on Chinese products, prompted Apple and other global corporations to explore alternative manufacturing locations. While Trump’s administration has since indicated a willingness to de-escalate the trade tensions between the world’s two largest economies, the ongoing uncertainty has made supply chain diversification a critical priority for major technology companies like Apple.
The Financial Times was the first outlet to report Apple’s plans to increase iPhone production in India on Friday.
As part of its broader shift away from dependence on China, Apple has established India as a central pillar of its new manufacturing strategy. Foxconn and Tata, its two primary suppliers in the country, currently operate three production facilities, with two additional factories under construction. These developments suggest a long-term commitment by Apple to strengthen its presence in India and reduce its vulnerability to external trade shocks.
While the challenges of cost and infrastructure remain, India offers several strategic advantages for Apple. These include a growing skilled labor force, a government eager to attract foreign investment in manufacturing, and a large domestic market with increasing demand for smartphones and digital technology.
Apple’s plans also align with India’s broader economic and industrial ambitions. Under Prime Minister Modi’s “Make in India” initiative, the government has been encouraging international tech companies to establish and expand their manufacturing operations within the country. This push is part of an effort to transform India into a global manufacturing hub, create employment opportunities, and reduce the nation’s dependence on imports for electronics and other goods.
Nevertheless, despite the political and economic incentives, the shift to India has not been without its complications. The Reuters source pointed out that while India is being positioned for a critical role in Apple’s global manufacturing, “higher duties on importing mobile phone parts compared to many other countries means it is still expensive for companies to produce in India.” This tariff policy could undermine the cost-effectiveness of local production unless reformed or offset by other incentives.
Still, the momentum behind Apple’s India strategy appears strong. The fact that shipments from India reached $2 billion in a single month underscores the rapid pace of expansion. Moreover, the involvement of key partners like Foxconn and Tata—two of the most prominent manufacturing firms in the world—indicates that Apple is investing not just capital but also deep strategic resources into making its India plan a success.
The ongoing construction of two more factories further cements Apple’s commitment to India as a manufacturing base. With five facilities either operational or in the pipeline, Apple and its partners are laying down the infrastructure needed to eventually produce the majority of U.S.-sold iPhones in India by the targeted 2026 deadline.
Although the company has not publicly confirmed the timeline or offered specifics about its long-term plans, the behind-the-scenes negotiations with Foxconn and Tata, as well as record-setting exports, offer a strong indication of where things are headed.
In summary, Apple’s efforts to move more of its production to India reflect a larger global trend driven by trade disputes, rising labor costs, and the need for diversified supply chains. As Apple looks beyond China, India is emerging as a key partner despite its higher production costs. With five factories planned or in operation, and billions of dollars in shipments already flowing, Apple is well on its way to achieving its goal of manufacturing most iPhones sold in the U.S. within India by 2026.