Apple Could Relocate Entire US iPhone Production to India by 2026

Apple is contemplating a major overhaul of its global supply chain that could see India become the sole manufacturing hub for iPhones shipped to the US as early as 2026. This move would mark Apple's biggest shift away from China yet, with the company's decision dependent on India's ability to ramp up its production capacity and the evolving landscape of US-China trade relations.

India’s Role in Apple’s Supply Chain Transformation

The transition to India as the primary production hub for US-bound iPhones comes amid Apple's strategy to diversify its supply chain and reduce reliance on China. Foxconn, a key Apple supplier, is set to play a crucial role in this transition with its new Bengaluru facility. Expected to be operational by the end of this month, the plant could manufacture up to 20 million iPhones annually once it reaches full capacity. Apple also has other suppliers ramping up their operations at existing sites across India.

Production Growth and Export Projections

India’s production capacity has been growing rapidly, with Apple targeting the production of up to 40 million iPhones in India by next year. In the fiscal year ending March 2025, Apple assembled $22 billion worth of iPhones in India, marking a nearly 60% year-on-year increase. Currently, 20% of Apple’s global iPhone production comes from India, a significant milestone for the company.

Foxconn and Other Suppliers Strengthening Operations in India

Foxconn’s facility in Tamil Nadu is the primary driver of Apple’s iPhone production in India. However, the Tata Group has also become an essential player in the Indian manufacturing ecosystem by acquiring Wistron’s operations and taking control of Pegatron’s India arm. This has enabled Apple to manufacture its entire iPhone range in India, including premium titanium Pro models. Apple’s production in India is now a vital component of its global supply chain.

The Impact of US-China Trade Relations

Apple’s strategic shift is influenced by recent US trade decisions, including reciprocal tariffs introduced during the Trump administration. The tariffs incentivized Apple to increase production in India, with the company exporting iPhones worth ₹1.5 trillion ($17.4 billion) in the fiscal year 2025. Despite this progress, Apple continues to rely on nearly 200 suppliers based in China, and the company is taking a cautious approach to shifting more production outside of China.

India’s Government Support and ‘Make in India’ Initiative

India’s rise as a global manufacturing hub is further supported by government incentives. Prime Minister Narendra Modi’s ‘Make in India’ initiative has played a key role in making India an attractive destination for tech manufacturing. The Indian government has introduced financial incentives worth $2.7 billion to boost electronics and semiconductor manufacturing, which are expected to further strengthen Apple’s local supply chain and make it more self-sufficient.

The Challenges of Moving Production Out of China

While India’s role in Apple’s supply chain is growing, the company still faces challenges in completely shifting production away from China. Cumulative tariffs on China remain high, at up to 145%, which continues to incentivize companies like Apple to move production to countries like India. However, Bloomberg Intelligence estimates it could take Apple up to eight years to shift just 10% of its production capacity out of China, indicating that this transformation is not immediate and will require time.

Conclusion: India’s Emergence as Apple’s Manufacturing Powerhouse

Apple’s potential move to shift all US iPhone production to India by 2026 is a significant development in the company’s ongoing diversification strategy. With the support of Foxconn and other suppliers ramping up their operations, India is well-positioned to play a central role in Apple’s global production network. Additionally, India’s government-backed initiatives to boost manufacturing capabilities will provide further impetus to this transformation, making India a key player in Apple’s future supply chain.