MC EXCLUSIVE Apple presses ahead with India scale-up, expands capacity and local sourcing despite US pressure

Foxconn’s subsidiary Yuzhan Technology is setting up a Rs 13,180-crore ($1.5 billion) display module assembly unit in Tamil Nadu, which will also handle components such as camera modules.

“They have done some trials using their space at existing facilities in the state. It will be a massive expansion for Apple in the local sourcing of components. Despite Trump's pressure, this is not stopping or slowing down and is continuing as per the plan,” said a second person privy to Apple’s expansion plans.

Apple wants more global suppliers

A third source confirmed that Apple is nudging more suppliers from China, Japan, Taiwan and elsewhere to establish factories in India.

“Apple is having back-to-back talks to suppliers to bring to key states like Tamil Nadu, Telangana and Karnataka. This is happening despite global pressure,” the source said.

Both Indian and global suppliers are expected to tap into the recently launched Rs 23,000-crore Electronics Components Manufacturing Scheme (ECMS) to start domestic production.

Apple vendors have already crossed the 20 percent domestic value-addition threshold in India. The government now wants them to raise it to 30-40 percent.

For the broader handset and electronics industry, the target is to increase value addition from 18 percent to 35–40 percent.

Apple is in talks with more than 40 Indian companies, including Kalyani Group’s Bharat Forge, Murugappa Group, and Titan, Wipro, HCLTech, Amber Electronics and Dixon Technologies, to source key components and building capital equipment. It has already onboarded Motherson Group and Aequs as partners.

Among those which have begun production are Sunwoda (battery packs), Foxlink (cables), and Aequs (enclosures).

“One company from South India, originally in textiles, is now looking to enter precision injection moulding for Apple,” the second sources said.

“Apple is resilient. The geopolitical noise we’re seeing is more of a distraction than something that will slow down or stop its plans,” Tarun Pathak, associate director at Counterpoint, said. “This is a massive, long-term investment, and behind the scenes, there has been significant work in areas such as workforce upskilling and integrating the pieces of an extremely complex supply chain. We believe Apple will continue to scale.”

All iPhone models are now being locally assembled and with new launches like the iPhone 16E and the upcoming 17 series models, volumes will only go up, he said.

This momentum, combined with Apple’s double-digit global growth, is bound to attract more component suppliers. Component makers, too, are increasingly viewing India as a long-term investment opportunity, Pathak said.

“In a recent study we did with them, a consistent message was that India is no longer seen as a ‘flip-flop’ or short-term destination. They are committed to a long-term perspective. So, for local assembly and component localisation, the trajectory looks very positive,” he said.

Capital equipment challenge

The only challenge for Apple is in the capital equipment and machinery space, as China has been delaying or blocking their exports which is essential for scaling operations in India.

“In the capital equipment and machinery space, we expect to see joint ventures between Indian and global firms in the coming quarters, with many likely from Japan. Apple is already in discussions with several players,” the second person said.

Apple’s goal is to raise its India-based manufacturing capacity to around 60 million iPhones annually, up from just over 40 million units last fiscal, largely for exports to the US.

Along with Foxconn and Tata (which has taken over Wistron’s factories and a controlling stake in Pegatron’s India operations), Apple is now producing iPhones across five factories, including two recently opened plants, to reduce reliance on China.

“For this, a lot of capacity expansion and local sourcing efforts are needed. The strategy is being executed,” the third source said.

Apple is manufacturing all four iPhone 17 models in India ahead of their debut on September 9 — the first time all new variations will ship globally from India at launch.

This reflects Apple’s confidence in India’s production quality, infrastructure, and factory ecosystem, sources said.

Queries sent to Apple and Foxconn didn’t elicit any response.

The push comes even as ties between Washington and New Delhi have been sliding over tariffs. Electronics, including smartphones and computers, however, remain exempt from US duties.

After Apple’s quarterly results on July 31, CEO Tim Cook said a “majority” of iPhones sold in the US in the past quarter were made in India, adding that the country continues to see record revenue growth led by iPhone sales.