India has crossed a defining milestone in its manufacturing journey, exporting $50 billion worth of iPhones in just five years. The surge has been driven by Apple’s strategic diversification away from China and the Indian government’s Production Linked Incentive scheme (PLI). Together, these forces have not only reshaped Apple’s global supply chain but also repositioned India as a serious hub for high-end electronics manufacturing.
What began as a cautious experiment has rapidly turned into one of the most consequential shifts in global consumer electronics production. From near-zero exports in 2020, India is now shipping iPhones at a scale that rivals long-established manufacturing centres.
From Pilot Project to Export Powerhouse
The transformation has been swift. In fiscal year 2020, iPhone exports from India were negligible, limited largely to entry-level models assembled for the domestic market. By fiscal 2025, exports had surged dramatically, with Apple shipping devices worth more than $16 billion in just the first nine months of the year alone.
This acceleration reflects a deliberate push by Apple to diversify manufacturing under its “China Plus One” strategy, aimed at reducing exposure to geopolitical risk, trade disruptions, and regulatory uncertainty. India emerged as a natural alternative, offering scale, cost competitiveness, and a policy environment increasingly aligned with global manufacturers.
The PLI Scheme as a Catalyst
The PLI scheme, launched in 2020, has been central to this growth. By offering direct financial incentives tied to production targets, the programme encouraged Apple’s contract manufacturers—most notably Foxconn, Pegatron, and Wistron—to expand rapidly in India.
These three vendors account for roughly 75% of smartphone-related PLI incentives, underlining how critical Apple has been to the programme’s success. Manufacturing hubs in Tamil Nadu and Karnataka have scaled quickly, supported by improved infrastructure, streamlined approvals, and state-level incentives.
The result has been a sharp rise not only in volumes but also in product mix. Premium models now dominate India’s iPhone exports, with high-end devices accounting for an estimated 75% of shipments, a sign of growing manufacturing sophistication.
Jobs, Skills, and Ecosystem Effects
The export boom has delivered substantial economic spillovers. Industry estimates suggest that Apple’s India operations have generated more than 350,000 direct and indirect jobs, spanning assembly, engineering, quality control, logistics, and support services.
Electronics manufacturing overall has expanded sixfold over the past decade, while exports have grown eight times, making smartphones India’s top export category, ahead of traditional leaders such as gems and jewellery. More than 40 new component suppliers have entered the ecosystem, gradually deepening local supply chains.
While India still imports many high-value components, PLI mandates are pushing manufacturers toward higher levels of local sourcing, with long-term targets of 40–50% value addition. Achieving that would significantly increase the domestic economic impact of iPhone manufacturing.
Geopolitics and Supply Chain Realignment
Apple’s shift toward India is inseparable from global geopolitical dynamics. Trade tensions between the US and China, combined with tariff risks and supply chain fragility exposed during the pandemic, have forced multinationals to rethink concentration risk.
India’s growing share of global iPhone output—estimated at around 14% today and potentially rising to 25% by fiscal 2026—reflects this realignment. A substantial portion of India-made iPhones now ship to the United States, helping stabilise supply and insulating Apple from future trade shocks.
For India, this integration into Apple’s global supply chain enhances economic resilience and strengthens strategic trade ties with Western markets.
Regional Development and Manufacturing Clusters
States hosting Apple suppliers have seen pronounced secondary effects. Tamil Nadu, in particular, has experienced growth in ancillary industries, logistics, and services, creating industrial clusters that support sustained employment and income growth.
These clusters are also becoming centres for skills development, with manufacturers working alongside local institutions to train workers in precision manufacturing and advanced quality systems. This human capital build-up is critical if India is to move beyond assembly into more complex manufacturing and design roles.
Challenges Beneath the Success
Despite the headline numbers, challenges remain. Labour relations, infrastructure reliability, and port efficiency continue to require attention. Periodic labour unrest at large facilities has highlighted the need for better worker protections, while power and logistics bottlenecks still affect operational efficiency in some regions.
Competition is also intensifying. Countries such as Vietnam, Indonesia, and Thailand are actively courting Apple suppliers, forcing India to continuously improve ease of doing business and policy predictability.
Strategic Implications Going Forward
For Apple, India is no longer a peripheral manufacturing base but a strategic pillar. For India, the $50 billion milestone validates the PLI-led manufacturing strategy and strengthens confidence in replicating the model across sectors such as semiconductors, EVs, and advanced electronics.
The iPhone export story is ultimately about more than smartphones. It illustrates how coordinated policy, global corporate strategy, and execution at scale can reposition a country within global value chains. If India sustains this momentum, the past five years may come to be seen not as an outlier—but as the foundation of a long-term manufacturing transformation.
