Foxconn, Apple’s primary manufacturing partner, plans to produce 25 to 30 million iPhones in India this year, more than doubling its output from the previous year. This move underscores Apple’s strategy to strengthen its manufacturing footprint in India and diversify its supply chain amid global uncertainties.
The Taiwanese contract manufacturer has been conducting trial runs at its facility in Bengaluru, Karnataka, aiming to meet Apple’s stringent quality standards and production targets. This initiative aligns with Apple’s broader objective to reduce reliance on Chinese manufacturing and mitigate risks associated with geopolitical tensions and supply chain disruptions.
Foxconn’s expansion in India is part of a larger trend of global tech companies seeking alternative manufacturing hubs. India’s Production-Linked Incentive scheme has been instrumental in attracting such investments by offering financial incentives to boost domestic manufacturing. In the fiscal year ending March 2023, Foxconn produced approximately ₹300 billion worth of iPhones, surpassing the PLI scheme’s cap of ₹200 billion, indicating the program’s success in scaling up production.
In addition to iPhone assembly, Apple is broadening its product manufacturing in India. A unit of Foxconn is set to commence the assembly of AirPods at a new factory near Hyderabad, Telangana, by early 2025, following successful trial productions. This diversification reflects Apple’s commitment to expanding its product assembly capabilities within the country.
However, the expansion has encountered challenges. Reports suggest that China is imposing restrictions on the movement of employees and specialized equipment essential for high-tech manufacturing to India and Southeast Asia. These measures appear aimed at limiting technology transfers and mitigating potential job losses, posing obstacles to Apple’s efforts to diversify its production bases.
Despite these hurdles, Apple’s manufacturing partners in India are making significant strides. Tata Electronics has acquired a 60% stake in Pegatron Technology India, which manages an iPhone plant near Chennai. This acquisition positions Tata as a formidable competitor to established players like Foxconn in the Indian iPhone manufacturing landscape.
The Indian government’s support has been pivotal in this expansion. Foxconn is establishing a mobile phone manufacturing plant in the Devanahalli Industrial Area, Bengaluru, with an investment of ₹21,911 crore. The company will receive incentives amounting to ₹6,970 crore under the Electronics System Design and Manufacturing policy, as announced by Karnataka’s Chief Minister.
