Apple's production shift: Tech major exports $6 billion worth of iPhones from India

Bloomberg reported, citing sources familiar with the matter, that the US tech giant exported nearly $6 billion worth of iPhones made in India, marking a one-third increase in value compared to the previous year. Annual exports are projected to exceed $10 billion for the fiscal year 2024.

Apple is rapidly expanding its production network in India, capitalizing on government incentives, a skilled workforce, and advancements in local technology.

This strategy is part of its effort to diversify away from China, amid rising geopolitical risks and tensions between Beijing and Washington.

In India, three key suppliers — Foxconn Technology Group, Pegatron Corp., and Tata Electronics — assemble iPhones in the southern region.

Foxconn’s Chennai-based unit leads iPhone production in India, accounting for half of the country’s exports.

Tata Electronics, which took over a factory from Wistron Corp. last year, became the first Indian assembler of iPhones.

It exported around $1.7 billion in iPhones from its Karnataka facility between April and September.

The $6 billion export figure refers to the estimated factory gate value of the devices, not their retail prices.

Apple representatives declined to comment, and spokespeople from Pegatron, Foxconn, and Tata did not respond to inquiries, as per Bloomberg.

iPhone exports represent a significant portion of India’s overall smartphone exports, propelling the category to become the top export to the US, valued at $2.88 billion in the first five months of the current fiscal year, Bloomberg reported, citing data from the trade ministry.

This marks a significant increase from five years ago, when annual smartphone exports to the US were just $5.2 million.

Despite the growth, Apple still holds under 7 percent of India’s smartphone market, which remains dominated by Chinese brands like Xiaomi, Oppo, and Vivo.

Nonetheless, Apple is investing heavily in India’s market.

The subsidies from Prime Minister Narendra Modi’s government facilitated local assembly of the high-end iPhone 16 Pro and Pro Max models, featuring improved cameras and titanium bodies.

Apple is also eyeing new retail stores in cities such as Bangalore and Pune.

Last year, CEO Tim Cook inaugurated the company’s first flagship stores in Mumbai and New Delhi, accompanied by a marketing push that helped drive Apple’s India revenue to a record $8 billion for the year ending in March.

While Apple’s success in India contrasts with its challenges in China, where the economy is struggling with post-pandemic lockdown effects and a property market crisis, China remains Apple’s main production and sales hub.

Nevertheless, India’s growing role is crucial to Apple’s diversification strategy.

In the fiscal year through March 2024, Apple manufactured $14 billion worth of iPhones in India, doubling its output.

Approximately $10 billion worth of these devices were exported, reflecting the company’s accelerated effort to broaden its production base beyond China, according to reports.