Apple Inc., in collaboration with its key suppliers, is ambitiously working towards assembling 32% of global iPhone production volume in India by the 2026-27 fiscal year. This shift, spurred by India’s Production-Linked Incentive (PLI) scheme, holds the potential to elevate India’s iPhone production value beyond US$ 34 billion by the end of FY27. Should global iPhone sales remain consistent with 2023-24 levels, this transformation underscores Apple's strategic pivot to India as a critical manufacturing hub for its flagship product. This transition not only serves to diversify Apple’s manufacturing base away from China but also strengthens India’s position within the global smartphone production landscape.

Significant Progress and Current Production Value

For the 2023-24 fiscal year, India contributed approximately 12-14% of global iPhone production volume, generating a production value of US$ 14 billion. Looking ahead to FY25, the production value is anticipated to rise to US$ 18 billion, while the market value could reach an estimated US$ 27 billion. This notable growth trajectory signals India’s emergence as a major player in Apple’s global supply chain, with Apple’s suppliers estimating a freight-on-board (FOB) production value of US$ 9 billion for the first half of FY24-25 alone. By the fiscal year's close, India is expected to account for 17-18% of global iPhone production volume and 14% in terms of production value.

Apple’s Revenue Strategy and High-Value iPhone Assembly in India

As iPhones contribute a substantial 51% of Apple’s global revenue, estimated at US$ 391 billion for the fiscal year ending September 2024, diversifying production is a strategic imperative. A crucial element in this strategy involves the assembly of high-value models like the iPhone 16 Pro series in India. This model, anticipated to be manufactured domestically, represents a shift towards higher-value production and is likely to bolster India’s share of Apple’s global production value in the coming years. The high-value assembly in India not only enhances Apple’s global supply chain resilience but also creates substantial incremental economic benefits for the Indian economy through job creation and skill development.

Government Collaboration and Economic Impacts

Government discussions with Apple and its suppliers have facilitated these ambitious production targets, and the ongoing engagement with officials aims to foster a supportive environment for Apple’s manufacturing ecosystem. This move to scale up iPhone assembly in India under the PLI scheme aligns with India’s broader Make in India initiative, which seeks to position the country as a leading electronics manufacturing hub. With Apple and its vendors investing heavily in expanding production capabilities, India stands to benefit from substantial economic uplift, including improved trade balance and export potential.

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Apple’s move to shift production from China to India mirrors a global trend of supply chain diversification, especially amid evolving geopolitical dynamics and trade policies. As part of this diversification, India’s PLI scheme has been instrumental, offering incentives to attract top tech companies and encourage large-scale manufacturing. The incremental production value generated through this initiative is expected to drive foreign investment, expand export revenues, and strengthen India’s position in global smartphone manufacturing.

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