Apple(AAPL.US) accelerates diversification of production locations: last year, iPhone production in India increased by 53%, with 25% of manufacturing done in India.

Last year, Apple Inc. (AAPL.US) increased iPhone production in India by approximately 53%, and currently, the flagship products produced in India account for a quarter of the company’s total output. According to sources, Apple expects to assemble about 55 million iPhones in India in 2025, up from 36 million in the previous year. Apple manufactures around 220 million to 230 million iPhones worldwide each year, with India’s share growing rapidly.

In recent years, under Prime Minister Narendra Modi’s production-linked incentive policies aimed at transforming India into the “world’s factory,” Apple has accelerated its expansion in the world’s most populous country. These subsidies help offset some structural cost disadvantages faced by Indian manufacturers, such as the lack of a supply chain as robust as China’s and logistical challenges.

By 2025, due to U.S.-China trade tensions and increased tariffs, Apple’s iPhone shipments in China (still its primary manufacturing location) face adverse effects. These tariffs have compelled Apple and its suppliers to shift more devices intended for the U.S. market to other production sites, with India emerging as a significant highlight.

Although the gap has narrowed, the costs of assembling electronic products and manufacturing components in India remain higher than in countries like China and Vietnam. This has prompted companies like Apple and Samsung Electronics to seek more support from the Indian government.

Companies are negotiating a new round of incentives with New Delhi to support export growth. The current production subsidy for smartphones in India will expire on March 31, and with the U.S. Supreme Court ruling some tariffs against China invalid, India needs to act quickly to maintain cost competitiveness.

Apple, headquartered in Cupertino, California, is currently assembling all versions of the latest iPhone 17 series in India, including the high-end Pro and Pro Max models. Its suppliers in India, including Foxconn, Tata Electronics, and Wistron, also produce older models like the iPhone 15 and iPhone 16 for local sales and export.

The growth in India’s output highlights Apple’s long-term supply chain strategy to establish a second major iPhone manufacturing base to meet global demand. The company is deepening and expanding collaborations with local suppliers to produce components such as lithium-ion batteries, watch and phone cases, and accessories like AirPods.

Beyond manufacturing, Apple is also working to increase its market share in India, where sales have surged past $9 billion. Apple plans to launch Apple Pay in India later this year, and its retail network now includes six stores, underscoring the increasing importance of India as both a manufacturing hub and a rapidly growing consumer market.