Make for the world: India must leverage Apple's shift from China

It was reported over the weekend that Apple intended to shift to India — from China — the production of all iPhones meant to be shipped to the United States (US). The reasoning behind the reported shift is not difficult to understand. Although the tariff turmoil unleashed by US President Donald Trump has targeted all trading partners, particularly those with a considerable surplus, he has singled out China. In recent days, the US has said that the punitive tariffs on China are unsustainable, but it is clear that trade with China will remain at risk. Thus, it makes sense for Apple, or any other large corporation, to derisk its position by moving production out of China to the extent possible.

 

For India, it would be a big advantage at multiple levels if Apple decided to move as reported. More clarity is expected to emerge later this week when the Cupertino-based tech giant reports its quarterly earnings and answers analyst questions. Apple, in fact, has been increasing production in India through contract manufacturers. According to one estimate, iPhones worth $22 billion were assembled in India over the year ended March 2025. This was 60 per cent higher than the previous year. Apple sells about 60 million iPhones annually in the US. If production for the US shifts to India by 2026 as reported, it may require doubling output, according to reports.

 

This will be a big opportunity. It is worth noting that, unlike many other multinationals that entered India to focus on the local market, Apple came to produce mainly for the world. Although its market share in India has increased, the expected increase in production scale will be for the US and the world. It exported iPhones worth over ₹1 trillion in 2024. This is a huge endorsement of India’s capabilities as a manufacturing destination. It has also been reported that local value addition has increased significantly in the recent period. Therefore, it is expected that once the scale of production increases substantially, component makers will also want to shift to India. Given the economic and geopolitical environment, Apple will not be alone in derisking its position. There would be others. Although diversification away from China was happening for some time, the latest trade shock might significantly accelerate the process and could be a big opportunity for India.

 

However, corporations will not come automatically. India will have to make significant efforts to bring investment. Governments at both Union and state levels took several proactive steps to enable the production shift to India in Apple’s case. It will not be practically possible for the Indian state to do the same for all companies. It is thus important that processes are quickly simplified so that corporations don’t get stuck in the Indian bureaucratic maze. Access to land, for instance, will need to be made easier. Besides, although India is negotiating a bilateral trade agreement with the US and reports suggest things are moving in the right direction, it will need to bring down import duties considerably across the board. This will allow equipment and inputs to come without tariff barriers and enable global corporations to establish a base in India. This will help boost manufacturing and create much-needed jobs for India’s ever increasing workforce. India must not let go of this opportunity, which could later be remembered as its “Apple moment”, a turning point that changed the fortunes of manufacturing in the country.