Despite surpassing analysts' forecasts for both revenue and profit in its fiscal second quarter, Apple CEO Tim Cook expressed caution about the months ahead, citing growing uncertainty from US-China trade tensions and tariff risks. In response, Apple is accelerating efforts to diversify its manufacturing base, working closely with partners like Foxconn to shift more production to India and Vietnam.
While smartphones and notebooks remain on the US tariff exemption list, Apple's leadership remains acutely aware that this status may not be permanent.
In its latest earnings call, Apple noted that the majority of iPhones sold in the US in the third quarter are now assembled in India, while nearly all iPads, Macs, Apple Watches, and AirPods sold in the US are made in Vietnam. Products destined for other global markets, however, are still predominantly manufactured in China.
Whether Apple can fully realize this manufacturing shift depends not only on the outcome of ongoing trade negotiations but also on the manufacturing readiness and efficiency of suppliers in India and Vietnam, especially India, which is increasingly positioned as the next key hub for iPhone production.
Apple bets big on India, but hurdles loom
Since 2017, Apple has worked to gradually diversify its supply chain, and India, with its 1.3 billion people, large youth labor force, and government-backed "Make in India" incentives, has become a central pillar of this strategy. Apple has tasked its key suppliers with scaling operations in India to mirror the manufacturing ecosystem it successfully built in China.
Foxconn, Apple's largest assembly partner, has been investing in India since 2006. Other suppliers like Pegatron and Wistron have also entered the market. But the road has not been smooth.
Wistron exited India in 2023, selling its operations to India's Tata Group. Pegatron followed suit in early 2025, transferring a 60 percent stake in its iPhone assembly unit to Tata as well. Foxconn remains the only major Apple supplier still independently expanding in India through a complex network of subsidiaries and joint ventures.
Industry insiders note that while India offers a favorable tariff environment, Apple's ambitions to shift all US-bound iPhone production to India by the second half of 2025 face significant logistical and structural hurdles.
Chief among these are infrastructure and supply chain challenges: inefficient logistics, high port and transport costs, unreliable electricity, and underdeveloped industrial facilities. Political and religious tensions have also made workforce management more complex. These factors, some believe, played a role in Apple encouraging—if not orchestrating—the handoff of Pegatron and Wistron's local operations to Tata.
India's iPhone output grows, but premium models lag behind
Today, roughly 20 percent of global iPhone output is produced in India, but most of this volume centers around mid-tier models. Premium versions like the iPhone Pro and Pro Max still represent a small fraction of India's production.
Scaling up high-end iPhone manufacturing in India will require expanded production lines, better-trained personnel, and deeper integration with the global component supply chain—challenges that are neither simple nor quick to overcome.
Even Foxconn, despite years of experience in India, is feeling the strain. As its operations expand rapidly, experienced mid-level managers are being spread thin across new facilities. Meeting Apple's increasingly ambitious capacity demands will put Foxconn's operational resilience—and its pivotal role in Apple's supply chain—to the test.
Article edited by Jerry Chen
