Apple ships $7.9 billion of iPhones from India in big shift from China

DELHI - Apple’s iPhone exports from India jumped by a third in the six months to September, underscoring its push to expand manufacturing in the country and reduce dependence on China.

The US company exported nearly US$6 billion (S$7.9 billion) of India-made iPhones, an increase of a third in value terms from a year earlier, people familiar with the matter said. That puts annual exports on track to surpass the US$10 billion in fiscal 2024.

Apple is expanding its manufacturing network in India at a rapid clip, taking advantage of local subsidies, a skilled workforce and advances in the country’s technological capabilities.

India is a crucial part of the tech giant’s effort to lessen its reliance on China,

where risks have grown along with Beijing’s tensions with the US.

Apple’s rising star in India contrasts with its flagging fortunes in China, whose economy has stuttered following harsh Covid-19 lockdowns and a property crisis. To be sure, Apple relies on China for the bulk of its manufacturing and sales, and India is unlikely to become its top market anytime soon.

Apple assembled US$14 billion of iPhones in India in the fiscal year to March 2024, doubling production and accelerating its drive to diversify beyond China. Of that, it exported roughly US$10 billion worth of iPhones.

Three of Apple’s suppliers – Taiwan’s Foxconn Technology Group and Pegatron, and home-grown Tata Electronics – assemble iPhones in southern India. Foxconn’s local unit, based on the outskirts of Chennai, is the top supplier in India and accounts for half of the country’s iPhone exports.

Salt-to-software conglomerate Tata Group’s electronics manufacturing arm exported about US$1.7 billion in iPhones from its factory in Karnataka state from April to September, the people said. Tata acquired this unit from Wistron in 2023, becoming the first Indian assembler of Apple’s best-selling product. The dollar figure refers to the devices’ estimated factory gate value, not the retail price.

iPhones account for the bulk of India’s smartphone exports and helped the product category become the top export to the United States at US$2.88 billion in the first five months of this fiscal year, according to federal Trade Ministry data. Five years ago, before Apple expanded manufacturing in India, the country’s annual smartphone exports to the US were a meagre US$5.2 million.

Still, Apple accounts for just under 7 per cent of India’s smartphone market, which is dominated by Chinese brands such as Xiaomi, Oppo and Vivo. And while that is still a small market for iPhones globally, Apple is making big bets.

The subsidies by Indian Prime Minister Narendra Modi’s administration helped Apple assemble its pricey iPhone 16 Pro and Pro Max models, with better cameras and titanium bodies, in India in 2024. It is also seeking to open new retail stores, including in the southern tech hub of Bangalore and western city of Pune.

In 2023, chief executive Tim Cook launched Apple’s first shops in the financial hub of Mumbai and the capital New Delhi.

The grand openings, the marketing blitz around the new stores, an aggressive online sales push as well as a rapidly growing middle class that aspires to own Apple products boosted its annual India revenue to a record of US$8 billion in the year until March. BLOOMBERG