Apple plans to shift the production of most iPhones intended for the U.S. market to India by 2026 to address U.S.-China trade tensions.

Apple Inc., due to the trade tensions between the U.S. and China and the pressure of high tariffs, plans to move most of the iPhone production for the U.S. market to India before the end of 2026. Working with Foxconn and Tata Electronics, Apple is expanding local production capacity even though production costs in India are 5% to 10% higher than in China, to tackle the tariff policies. This strategy is intended to lessen dependence on Chinese manufacturing and to counter the high tariffs the U.S. has placed on Chinese products.

Summary of Apple's Supply Chain Restructuring Plan

For a long time, Apple has relied on China as its main production base for iPhones. Over the past 20 years, through partners like Foxconn, it has established a world-leading manufacturing system in China. However, with the U.S. government imposing tariffs as high as 145% on Chinese goods, Apple faces significant financial pressure, with its market value once evaporating by $700 billion. To reduce its reliance on Chinese manufacturing, Apple has decided to accelerate supply chain diversification and shift part of its production focus to India.

According to the Financial Times, Apple's goal is to have more than 60 million iPhones sold annually to the U.S. assembled in India by the end of 2026. This plan means that India's annual iPhone production needs to double, increasing from the current 30-40 million units to over 80 million units.

Partnership Between Foxconn and Tata

To achieve capacity expansion, Apple is closely partnering with Foxconn and Tata Electronics. Foxconn currently has a large factory in Chennai, Tamil Nadu, in southern India, which produced about 20 million iPhones last year, including the latest iPhone 15 series. Tata Electronics, after acquiring Wistron's Indian business, has taken over part of the iPhone assembly lines and is responsible for overseeing Pegatron's production facilities in India.

Foxconn and Tata currently operate three factories in India, with two additional plants under construction. These new facilities are expected to significantly enhance India's iPhone assembly capacity, supporting Apple's 2026 target.

Additionally, Apple has begun early production development work for new models in India. According to The Information, Apple has chosen to trial-produce the basic model of the iPhone 17 in Indian factories for the first time, demonstrating confidence in India's manufacturing capabilities.

Cost Differences Between Production in India and China

Although India has advantages in policy support and market potential, production costs remain higher than in China. According to Reuters, citing informed sources, the cost of manufacturing iPhones in India is about 5% to 8% higher than in China, and in some cases, even up to 10%. This difference is mainly due to India's higher import tariffs on mobile phone components and the still-maturing infrastructure.

To reduce production costs, the Indian government has actively promoted the "Make in India" policy in recent years, offering production-linked incentives (PLI) and other incentives for the electronics manufacturing industry. In early 2025, the Indian government further eliminated import taxes on some mobile phone components to attract more foreign investment.

Progress in Exports and Capacity Expansion

Apple's manufacturing business in India has shown rapid growth. According to Bloomberg, by the end of the fiscal year in March 2025, the total value of iPhones assembled in India reached $22 billion, an annual increase of nearly 60%, accounting for about one-fifth of global iPhone production.

In March this year, Foxconn and Tata exported iPhones worth about $2 billion and weighing 600 tons from India to the U.S., achieving a new monthly export milestone. This shipment was mainly transported by air to ensure sufficient inventory in the U.S. market before changes in tariff policies.

Supply Chain Challenges and Continued Dependence

Despite the gradual transfer of assembly operations to India, Apple still heavily relies on the Chinese supply chain for components. The production of iPhones involves hundreds of parts, with many key components still manufactured by Chinese suppliers. According to the Financial Times analysis, if Apple wishes to relocate 10% of its entire supply chain from China, it may take up to eight years.

Additionally, the attitude of Chinese authorities towards Apple's supply chain transfer poses challenges. According to Radio Free Asia, the Chinese government has extended the approval time for exporting manufacturing equipment, with some equipment export applications even being rejected, introducing uncertainty into Apple's production relocation efforts.

Apple plans to shift the production of most iPhones intended for the U.S. market to India by 2026 to address U.S.-China trade tensions.

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