U.S. President Donald Trump recently criticized Apple CEO Tim Cook for expanding iPhone production in India, saying he’d rather see those devices made in America. While this sentiment appeals to domestic manufacturing rhetoric, it ignores the economic realities of global production.
Building iPhones in the U.S. could triple their cost, disrupt supply chains, and stall Apple’s growth in emerging markets. Meanwhile, Apple’s key supplier Foxconn just committed $1.5 billion to its Tamil Nadu facilities, doubling down on India as a critical manufacturing base. With lower costs, a growing workforce, and improving infrastructure, India simply makes strategic sense—for Apple and for the future of global tech manufacturing.
Foxconn’s $1.5 Billion Bet on Tamil Nadu
Foxconn, Apple’s largest contract manufacturer, has committed $1.5 billion (₹12,800 crore) to expand its iPhone production facilities in Tamil Nadu, India, through its Singapore-based subsidiary, Yuzhan Technology India. This move not only strengthens Apple’s China-plus-one strategy but also signals India’s growing stature as a high-tech manufacturing hub.
Why It Matters: India’s iPhone Output Is Skyrocketing
- In FY 2023-24, Apple assembled $14 billion worth of iPhones in India.
- In FY 2024-25, that figure surged to $22 billion, a 57% year-on-year jump.
- Foxconn alone accounted for over $1.3 billion in exports to the U.S. in March 2025.
- India now makes 18% of the world’s iPhones, up from 7% in 2022.
Apple’s Shift from China: Strategic, Not Symbolic
Amid rising geopolitical tensions, U.S.–China trade risks, and Covid-induced supply chain disruptions, Apple is diversifying its manufacturing footprint. India is emerging as China’s most credible competitor, offering:
- Cost-effective labor
- Government incentives
- A massive domestic market
- Political alignment with U.S. interests
Why Tamil Nadu?
- Foxconn already operates a large iPhone plant in Sriperumbudur, near Chennai.
- The state offers logistics infrastructure, policy stability, and skilled labor.
- Tamil Nadu accounted for 30% of India’s electronics exports in 2024.
- It has emerged as a preferred destination for semiconductors, auto electronics, and mobile components.
The Bigger Picture: India’s Electronics Ambitions
- PLI Scheme (Production Linked Incentive) has catalyzed over $20 billion in investments in electronics since 2020.
- India aims to grow its electronics industry from $75 billion in 2023 to $300 billion by 2026.
- Domestic value addition (e.g., chip packaging, camera modules, batteries) is rising steadily—critical for economic resilience.
Who Else Is Betting Big on India?
- Tata Electronics has started iPhone production and is expected to acquire Wistron’s India unit.
- Pegatron and BYD Electronics are expanding too.
- India’s iPhone supply chain now includes Sunwoda (batteries), Salcomp (chargers), and Avary (PCBs).
The Risks and Roadblocks
India’s rapid rise is real—but not without challenges:
- Component ecosystem is still import-dependent (especially from China, Vietnam).
- Labor unrest and local protests can disrupt momentum (e.g., Foxconn’s 2021 shutdown).
- Power reliability and logistics bottlenecks remain concerns for global OEMs.
Job Creation & Skill Development: The Next Frontier
- Foxconn’s expansion is expected to create 6,000–8,000 new direct jobs in Tamil Nadu.
- Indirect job creation could exceed 25,000, including suppliers and logistics partners.
- However, India needs to scale technical education and skilling programs to meet demand for high-end assembly and R&D roles.
Outlook: Can India Capture 25% of Apple’s Supply Chain?
Analysts from Morgan Stanley and JPMorgan believe India could:
- Reach 25% of global iPhone production by 2027
- Export $40 billion worth of smartphones annually by 2026
- Replace Vietnam as Apple’s second-largest base after China
But to get there, India must:
- Deepen its local supply chain
- Improve customs and tax clarity
- Ensureconsistency in policy and incentives