Apple has been collaborating with both federal and state authorities to increase local sourcing, according to the government.
In response to President Donald Trump’s directive for the iPhone manufacturer to increase its production in the US, India is stepping up its attempts to persuade Apple to expand its supply chain domestically. Despite Trump’s concerns about Apple’s growing manufacturing base in India, the government wants the iPhone maker to significantly increase local value addition in its handsets by utilizing a recently announced electronics components scheme.
Apple has been collaborating with both federal and state authorities to increase local sourcing, according to government and business sources who spoke to Moneycontrol. Additionally, the business is encouraging suppliers from India and outside to start producing electronic components domestically by utilizing the incentives provided by the recently introduced Rs 23,000 crore Electronics Components Manufacturing Scheme (ECMS).
Increasing value-addition to as much as 40 percent for this sector is the only option to enhance supply chains. When discussing the government’s strategy for global electronics and phone manufacturers, such as Apple, a senior government official told Moneycontrol, “This way we ensure that production stays here.”
The government wants the value added to the entire electronics and phone industry to rise from the present 18% to as much as 35–40%. Although it is now just 10%, Apple, the company that makes iPhones, is optimistic about greatly boosting local value addition and is in discussions with a number of Indian and international component manufacturers.
According to a different industry source, Apple intends to localize the majority of the parts it purchases from China. “Apple and its partners will also seek approval and begin local production with the new component policy, which will eventually lead to higher value-addition.”
Several Indian businesses have begun negotiating incentives for the production of components for the Apple supply chain with the state governments of Telangana, Karnataka, and Tamil Nadu.
“Apple began stepping up its efforts to increase its reliance on India for the iPhone, including expanding its supply chain here.” It is a component of their long-term strategy and began two to three years ago. They want the supplier ecosystem near final production; thus, they are negotiating with current states where they have production facilities in conjunction with partners, according to another source.
For parts used in devices like iPhones, MacBooks, iPads, and AirPods, Apple is actively constructing an ecosystem of Indian vendors.
On November 21, Moneycontrol revealed that the US IT behemoth had partnered with over 40 Indian businesses, including IT firms, electronics manufacturing service providers (EMS), Dixon Technologies, Wipro Enterprises, Amber Electronics, and HCLTech, as well as major conglomerates.
Furthermore, because of continuous disruptions brought on by Chinese authorities who have been postponing or preventing the export of vital manufacturing tools necessary for expanding iPhone production in India, the company is looking more and more to partner with Indian companies to produce capital equipment, such as machinery.
In order to investigate joint venture opportunities with Chinese, South Korean, Taiwanese, and Japanese companies to produce essential components like displays and camera modules, as well as capital equipment, locally, Apple is interacting with Motherson Group, Aequs, and Bharat Forge, which it has already onboarded as Indian suppliers.
According to sources, Apple is working with Indian companies to improve supply chain resilience, cut operational expenses, and lessen logistical risks.
In order to avoid Trump’s tariffs, Apple has already increased production in India; in March, it sent almost 600 tons of iPhones valued at $2 billion to the US. The next step was to greatly increase manufacturing of the next generation of iPhone 17 Pro models, which are anticipated to be released in September of this year.
Apple’s partners are already establishing new facilities and increasing the capacity of current Indian operations. Hon Hai Precision Industry Co., a subsidiary of Taiwanese contract maker Foxconn, has started producing Apple AirPods for export at its facility in Hyderabad. Meanwhile, the company’s new, larger plant in Bengaluru is about to start up operations to increase iPhone production in India. It is anticipated to be crucial in increasing India’s exports.
As production moves away from China, Hon Hai plans to invest $1.5 billion in its India division, the firm announced in a May 19 market filing.
According to sources, the new iPhone factory owned by Tata Electronics in Hosur has started up and is currently assembling iPhones, including the 16 and 16e models. Additionally, they stated that they are greatly increasing their manufacture of enclosures for Apple’s iPhones at their Hosur facility in order to double their output.
