How is Apple’s Manufacturing Expansion in India Benefiting the Economy?
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Synopsis
Apple's strategic decision to manufacture the iPhone 17 in India marks a significant shift in global tech manufacturing. This move not only aims to cut tax leakage but also promises to create jobs and enhance India's role as a premium device production hub. Explore the broader implications of this shift in the tech landscape.
Key Takeaways
- Apple is producing the entire iPhone 17 range in India.
- The move is part of the 'Make in India' initiative.
- Local production helps avoid high import duties.
- Significant job creation and economic benefits are expected.
- Exports of iPhones from India are surging.
New Delhi, Sep 10 (NationPress) The decision by Apple, the US technology giant, to produce its entire iPhone 17 lineup in India is set to significantly improve supply chain efficiency, minimize tax leakage, and solidify India's position as a premium manufacturing destination for devices, experts indicated on Wednesday.
The 'Make in India' initiative, further supported by Apple's increased operations, is projected to create numerous jobs, enhance exports, and elevate India's status as a high-tech manufacturing leader, according to Grant Thornton Bharat.
By relocating production to Tamil Nadu and Karnataka through collaborations with Foxconn and Tata Electronics, Apple circumvents the 20 percent Basic Customs Duty that applies to imported, fully assembled products.
Local assembly also protects the company against potential tariff hikes in the United States, stated Krishan Arora, Partner – Tax Planning & Optimization at Grant Thornton Bharat.
In light of the US imposing higher tariffs on India, some exports from the country are now subject to duties as high as 50 percent, although smartphones currently remain exempt.
This strategic move by Apple has also unlocked additional benefits under India's Production Linked Incentive (PLI) scheme, which provides cash incentives ranging from 4 to 6 percent on incremental phone sales produced in India over five years, Arora noted, emphasizing that this decision may not lead to immediate price reductions for Indian consumers.
This initiative has enabled Apple’s contract manufacturers to exceed $10 billion in iPhone exports for FY 2024-25, with exports increasing by 53 percent year-on-year in the first half of 2025, reaching 23.9 million units.
During the first half of 2025, approximately 78 percent of iPhones assembled in India were exported to the US, up from 53 percent the previous year.
The Tamil Nadu government has introduced capital subsidies, expedited environmental approvals, and dedicated electronics parks, while Karnataka has provided land at reduced rates, power tariff reductions, and skill development funding.
Point of View
I believe that Apple's decision signifies a pivotal moment for India's manufacturing sector. By aligning with governmental initiatives and leveraging local resources, this move not only reinforces India's position in the global tech arena but also represents a commitment to sustainable economic growth. This partnership is a win-win for both India and Apple.
NationPress
10/09/2025
Frequently Asked Questions
Why is Apple shifting its manufacturing to India?
Apple is moving its manufacturing to India to enhance supply chain efficiency, reduce tax leakage, and benefit from local assembly incentives.
What benefits does the PLI scheme offer?
The Production Linked Incentive scheme provides cash incentives ranging from 4 to 6 percent on incremental phone sales manufactured in India.
How will this impact job creation in India?
Apple's manufacturing expansion is expected to generate significant employment opportunities across various sectors in India.
What are the tax implications of local assembly for Apple?
By assembling products locally, Apple avoids a 20 percent Basic Customs Duty on imported devices, enhancing its profitability.
What is the expected export growth for Apple from India?
Apple's contract manufacturers have surpassed $10 billion in iPhone exports for FY 2024-25, indicating a strong growth trajectory.
