Apple Reduces China Production, India Benefits By $6bn This Year

Apple’s iPhone exports from India have reportedly jumped by a third in the six months through September, as the Cupertino-based company looks to increasingly shift production away from China.

The company is reported to have exported nearly $6 billion (A$9.15 billion) of India-made iPhones, a one-third increase in value terms from a year earlier.

That puts annual exports on track to surpass the about $10 billion (A$15.25 billion) of fiscal 2024.

Three Apple suppliers — Taiwan’s Foxconn Technology Group and Pegatron Corp, as well as homegrown Tata Electronics — assemble iPhones in southern India.

Foxconn’s local unit, based on the outskirts of Chennai, is the top supplier in India and accounts for half of the country’s iPhone exports, according to Bloomberg.

The Tata Group’s electronics manufacturing arm exported about $1.7 billion (A$2.59 billion) in iPhones from its factory in Karnataka from April to September. Tata acquired the unit from Wistron Corp. last year, thereby becoming the first Indian assembler of the iPhone.

iPhones account for the bulk of India’s smartphone exports. Smartphone exports to the US reached $2.88 billion (A$4.39 billion) in the first five months of this fiscal year, according to federal trade ministry data. Five years ago, before Apple began manufacturing in India, the country’s annual smartphone exports to the US were just $5.2 million (A$7.93 million).

As ChannelNews reported in August, Apple was reported to have for the first time begun to make its most expensive iPhone Pro and Pro Max models in India.

Foxconn Technology Group started training thousands of workers at its factory in southern Tamil Nadu earlier this year to manufacture those Pro and Max models.

Apple isn’t abandoning China production, but is keen not to focus 80 per cent of the world’s iPhone production in a single country, and is hence looking at countries such as India and Vietnam to take over some of its iPhone production.

Apple still has to import parts from China to manufacture its products in India and Vietnam. High transportation costs add to the overall production cost of the iPhones. The power supply infrastructure in India and Vietnam is also not as robust as China, with factories in those countries having to sometimes face power cuts which hinders production.

Still, Apple is determined to lessen its dependence on China for its iPhone production. It assembled $14 billion (A$21.34 billion) of iPhones in India in the fiscal year through March 2024.