Apple Inc and its suppliers are reportedly aiming to assemble 32% of the iPhone’s global output and 26% of its total value in India by the financial year 2026-27.

What Happened: This shift is expected to occur a year after the conclusion of the five-year production-linked incentive (PLI) scheme for mobile devices in India, the Business Standard reported, citing sources. If global iPhone sales remain consistent with FY24 levels, this could represent a production value exceeding $34 billion (₹2.87 lakh crore).

The tech giant has ambitious plans to ramp up iPhone assembly in India, the publication quoted sources familiar with discussions between Apple, its suppliers and government bodies. By the end of FY25, India is projected to account for 17%-18% of global iPhone production in terms of volume and around 14% in value.

In FY24, India handled 12%-14% of the total global iPhone production volume, contributing over 10% of the total market value, which includes additional costs like sales and distribution expenses. Supplier planning suggests that Apple will likely close FY25 with a production value of $18 billion (₹1.5 lakh crore) in India, translating to a market value of around $27 billion (₹2.28 lakh crore), according to Business Standard.

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Apple is also reportedly in discussions with key industry players to increase manufacturing in India, diversifying its supply chain away from China.

Additionally, Apple is planning to open four new retail stores in India, as reported in October. This expansion follows the successful launch of its first two stores in Delhi and Mumbai earlier in April 2023.

This shift is in line with earlier projections estimated that India could capture 25%-30% of iPhone production volume by 2026-27. Originally, Apple committed to relocating just 10% of its production to India by the end of the PLI scheme, but the company has already exceeded this target in the third year.

The landscape could shift further if U.S. President-elect Donald Trump enacts higher tariffs on mobile devices, currently set at 15%, with a specific focus on China amid ongoing trade tensions. Trump has floated the idea of imposing punitive tariffs as high as 60%, which could drive Apple to increase production in countries like India, Vietnam, and other Southeast Asian markets.

However, these plans could face hurdles if the Indian government fails to address the cost disadvantages compared to China and Vietnam. This includes lowering tariff rates on key components, easing labour regulations and enhancing logistical infrastructure.

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