India is doubling down on efforts to get Apple to scale up its supply chain within the country amid President Donald Trump’s diktat to the iPhone maker to enhance its production in the United States. The government wants the iPhone maker to sharply boost local value addition in its smartphones by leveraging a newly launched electronics components scheme, even as Trump voices concern over Apple’s expanding manufacturing base in India.
Government and industry sources told Moneycontrol that Apple has been working with both central and state authorities to expand local sourcing. The company is also urging Indian and global suppliers to take advantage of incentives offered under the recently launched Rs 23,000 crore Electronics Components Manufacturing Scheme (ECMS) to start domestic production of electronic components.
“The only way to strengthen supply chains is to increase the value-addition to as much as 40 percent for this sector. This way we ensure that production stays here,” a senior government official told Moneycontrol while commenting on the government’s plan for multinational electronics and handset makers, including Apple.
The government wants the whole handset and electronics industry to increase the value-added to this sector to as much as 35-40% from 18% currently. For Apple, it is as low as 10% at the moment but the iPhone maker is bullish about increasing local value addition significantly and is in talks with several Indian and multinational component makers.
Another industry source said Apple plans to localise most of the components that it sources from China. “With the new component policy, Apple and its partners will also look to apply for approval and start local production, which over time will result in higher value-addition.”
Several Indian companies have started discussions with the Tamil Nadu, Karnataka, and Telangana state governments about incentives for component production for the Apple supply chain.
“Apple started ramping up its efforts towards increasing dependence on India for the iPhone, which includes more supply chain here. It started 2-3 years back and is part of their long-term plan. They, along with partners, are talking to existing states where they have production facilities as they want the supplier ecosystem close to final production,” another person said.
Moneycontrol’s queries sent to Apple didn't elicit any response.
Apple is actively working to build an ecosystem of Indian suppliers for components used in products like iPhones, MacBooks, iPads, and AirPods.
Moneycontrol reported on November 21 that the US tech giant has engaged with more than 40 Indian companies, including large conglomerates, IT firms, and electronics manufacturing service providers (EMS), including Dixon Technologies, Wipro Enterprises, Amber Electronics, and HCLTech.
Additionally, the company is increasingly seeking to collaborate with Indian firms to produce capital equipment, such as machinery, due to ongoing disruptions caused by Chinese authorities, who have been delaying or blocking the export of critical manufacturing tools essential for scaling up iPhone production in India.
Apple, which has already onboarded Motherson Group, Aequs and Bharat Forge as Indian suppliers, is engaging with these Indian companies so that they could explore joint venture opportunities with Chinese, South Korean, Taiwanese, and Japanese companies to produce key components like displays and camera modules, as well as capital equipment, locally.
Sources said Apple’s engagement with Indian firms aims to reduce logistical risks, lower operational costs, and enhance supply chain resilience.
Apple has already stepped up production in India to beat Trump's tariffs, shipping some 600 tons of iPhones worth $2 billion to the US in March. This was followed by another move to significantly scale up production of the upcoming iPhone 17 Pro models, which are expected to be launched in September this year.
Apple’s partners are already expanding the capacities of their Indian factories and setting up new units. Taiwanese contract manufacturer Foxconn’s subsidiary Hon Hai Precision Industry Co. has commenced production of Apple AirPods at its Hyderabad facility for export, while its new, larger plant in Bengaluru is set to begin operations soon to ramp up iPhone production in India. It is expected to play a key role in ramping up exports from India.
Hon Hai will inject $1.5 billion into its India unit as production shifts away from China, the company said in an exchange filing on May 19.
Sources said Tata Electronics’ new iPhone factory in Hosur has also begun operations and is assembling iPhones, including iPhone 16 and iPhone 16e. They added that it is also significantly ramping up to double the production of enclosures for Apple's iPhones at its Hosur unit.
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