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Apple’s Early Bet on India Pays Off as iPhone Production Shifts Amid U.S.-China Trade Tensions

by Team Lumida
August 8, 2025
in Markets
Reading Time: 5 mins read
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Why Apple’s AI Approach May Save Its Reputation
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Key Data & Insights:

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  • Strategic Shift: Apple began assembling iPhones in India in 2017, anticipating slowing sales in China and rising U.S.-China trade tensions.
  • Production Growth: India’s iPhone production is expected to more than double in the next two years, with India supplying most iPhones sold in the U.S. during Q2 2025.
  • Workforce & Infrastructure: Foxconn’s Indian plant employs ~40,000 workers (80% women), with new dormitories and infrastructure investments supporting expansion.
  • Cost Advantage: Entry-level assembly workers in India earn ~$200/month, significantly lower than $700-$1,000/month in China.
  • Challenges: India faces hurdles including regulatory complexity, infrastructure gaps, and less experience in precision manufacturing compared to China’s mature ecosystem.
  • Government Support: India offers manufacturing subsidies totaling $2.7 billion, with states like Tamil Nadu providing additional incentives and infrastructure upgrades.
  • Supply Chain Diversification: Apple also sources components from Vietnam, Malaysia, and the U.S., reducing reliance on China.
  • China’s Response: China exerts behind-the-scenes pressure on suppliers, including reducing Chinese training personnel and delaying machinery shipments to India.

What’s Really Happening?

Apple’s foresight in diversifying iPhone production to India years before tariffs and trade tensions escalated has positioned it well to mitigate risks from U.S.-China conflicts. The company is building a significant manufacturing hub in India, supported by government incentives and a growing skilled workforce.

While India’s assembly capabilities have improved, the country still lags behind China in producing complex components and maintaining a fully integrated supply chain. Apple and its suppliers are navigating regulatory and logistical challenges, but the momentum is strong.

The shift reflects a broader trend of global supply chain realignment as companies seek to reduce geopolitical risks and tariff exposure.


Why Does It Matter?

  • For Apple: India’s growing role in iPhone production reduces tariff exposure and geopolitical risk, supporting supply chain resilience and cost management.
  • For India: The expansion boosts local employment, infrastructure development, and positions India as a key player in global electronics manufacturing.
  • For China: Apple’s shift signals a gradual erosion of China’s dominance in smartphone manufacturing, with potential long-term economic implications.
  • For Global Supply Chains: The move exemplifies how multinational companies are adapting to geopolitical tensions by diversifying manufacturing footprints.

What’s Next?

  • Capacity Expansion: Watch for completion and ramp-up of new Indian production centers, potentially doubling output by 2027.
  • Component Localization: India aims to develop capabilities for precision components to reduce import dependence and enhance supply chain integration.
  • Geopolitical Impact: Continued U.S.-China tensions may accelerate supply chain diversification beyond India to other countries.
  • Labor & Infrastructure: Ongoing improvements in workforce training and infrastructure will be critical to India’s competitiveness.
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© 2025 Lumida Wealth Management LLC is an SEC registered investment adviser. Privacy Policy. Cookies Policy.
Disclaimer Important Information This site is for informational purposes only. Information presented on this site does not constitute as investment advice.

Lumida Wealth Management LLC (‘Lumida”) is an SEC registered investment adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.

Lumida's website (referred to herein as the "Website") is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of the Website on the Internet should not be construed by any client and/or prospective client Lumida’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet.

Any subsequent, direct communication by Lumida with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.

‍Lead Capture Forms: By submitting your contact information in the forms on this site, you are not obligated to invest in Lumida's product or services.
‍Address: Lumida Wealth Management, 25 W 39th Street Suite 700, New York, NY 10018