Apple production is growing in India as the company seeks to move its operations outside of China.
Key Details
- In the last year, Apple has assembled more than $7 billion worth of iPhones in India, tripling its previous production in the country as it moves outside of China.
- Nearly 7% of the company’s iPhone production now goes through India. In 2021, India accounted for 1% of iPhone production, Bloomberg reports.
- Indian Prime Minister Narendra Modi has announced multiple incentives to promote manufacturing within the nation, furthering Apple’s inclination to move into the country.
- If Apple’s rapid expansion in India continues, a quarter of all its iPhones could be assembled there by 2025—less than two years from now.
Why it’s news
Due to supply-chain difficulties and growing tensions between the U.S. and China, Apple has been working to diversify its production location, moving many operations to India and the surrounding countries.
Though Apple was already looking to diversify its supply chain before the pandemic, the ensuing supply-chain disruptions highlighted the company’s need to decrease its dependence on China.
Indian lawmakers have been working to turn the country into a major manufacturing hub and a potential alternative to Chinese production. A significant portion of Apple’s supply chain is currently in China, making it incredibly difficult to change production, but also making Apple particularly vulnerable to any disruptions, Bloomberg reports.
For India, successfully moving some iPhone production to the country represents a win in its efforts to grow its manufacturing prowess. A well-known brand like Apple moving to the country could make it easier for India to convince other American companies to move some of their manufacturing to the nation. India has some extra momentum as Chinese manufacturing is still recovering from COVID-Zero restrictions.
Though Apple has moved some manufacturing to India, it has no retail stores in the country. That changes next week as the company opens its first two stores in Mumbai and New Delhi. Apple CEO Tim Cook is expected to inaugurate the two stores in person, emphasizing how important Apple views its relations with India.
Backing up a bit
More companies are considering relocating their manufacturing currently based in China—but the task is daunting. Between tariffs, COVID restrictions, and unsteady international relations, businesses are reconsidering manufacturing relationships with China.
Moving established manufacturing facilities and reworking current supply chains is a monumental task. Apple, for example, will take an estimated eight years to move just 10% of its production out of China, Bloomberg reports.
Smartphone production, in particular, is difficult to relocate as China makes up 70% of global smartphone production.