Apple likely to ring in nearly $40 billion iPhones from India in FY26

Could meet 80% of US demand and full domestic demand

Apple Inc’s target of iPhone production by value in India could be close to $40 billion by the end of FY26, enabling the firm to meet 80 per cent of its demand in the US and 100 per cent of growing domestic demand, according to stakeholders aware of the development. 

Discussions on this came against the backdrop of the 2025 second-quarter results call, hosted by Chief Executive Officer Tim Cook. There he said the majority of iPhones sold in the US starting April-June would come from India. This is mainly due to the US administration’s reciprocal tariffs, allowing the import of phones currently with zero duty from India while China has to pay 20 per cent, making a shift of capacity to meet US demand inevitable and cost-effective.

  A query to the Apple Inc spokesperson did not elicit any reply.     

The US smartphone trade data shows an average annual import of $60 billion over the last five years. 

Of this, iPhones constitute nearly two-thirds — $38 billion-$41 billion per year since 2020.

  It’s this opportunity that Apple has said will begin shifting to India from this quarter, assuming no major changes in tariffs. 

According to calculations and discussions, Apple in India has to increase the value of production from $22 billion, which includes doubling exports from $17.5 billion. To achieve this, iPhone exports will have to hit $32 billion-35 billion.

 

With the domestic market estimated at $5 billion-8 billion, iPhone production will go up to $40 billion to meet 80 per cent of US demand.

 

However, in the following year India is expected to fully cater to US demand. In simple terms Apple Inc on average has to produce around iPhones worth $3.3 billion per month.

 

According to projections by the Indian Cellular and Electronics Association (ICEA), India should be able to export smartphones worth $35 billion in FY26, a sharp increase from $25 billion last year. The projections were done before Cook’s announcement.

 

In FY24, iPhone sales contributed 51 per cent, or $201 billion, of Apple’s global revenue of $391 billion. iPhone sales have held their ground for the first six months of the current financial year (September 28-September 27) when the results were announced on May 1.  It is clear iPhones remain Apple’s star performer.

 

However, there are a few challenges. First, the initial plan is based on the assumption that at the end of the tariff negotiations, India will emerge in a better place than China. Analysts, however, say any change in favour of China is unlikely, especially with US President Donald Trump's strong position on the country. They point out that even in a worse situation the US could bring back 10 per cent duty (across the board with no exemption for smartphones) on India but even this would mean the China duty will be double that of India.

 

Two, as the move will require shifting machinery from China (for additional capacity) as well as importing new equipment to make the forthcoming iPhone 17, there are concerns about China applying brakes on the import of implements, which could affect the plan.  

 

Three, such a swift expansion of production would also require assistance from the government. The NITI Aayog has repeatedly told the government that India will need to rethink tax laws to enable global value chains.

 

SYSTEM UPDATE

  $38 bn-$41 bnworth of iPhones being imported by the US, mostly from China, and now India

  20% of US iPhone imports are from India

  $5 bn-$8 bn worth of iPhone assembling planned by FY26-end

  $32 bn-$35 bnof exports from India aimed by end of financial year