Apple benefits from India's new manufacturing incentives

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For several years, the technology company Apple has been pushing ahead with the diversification of its global production structure. A key component of this strategy is the increasing relocation of iPhone manufacturing to India. At the same time, the Indian government is attempting to further expand the country's growing role as a production location.

With a key subsidy program for smartphone manufacturing in India about to expire, the government is working on new incentives for companies. The goal is to continue the strong growth of electronics production and retain international corporations in the country.

International technology production is undergoing a period of fundamental change. Trade conflicts, geopolitical tensions, and strategic decisions by large companies are leading to a reorganization of supply chains.

Apple is among the companies that are increasingly distributing their production across multiple countries. India is playing an ever-greater role in this. Supported by government programs and economic policy initiatives, the country is developing into a key location for smartphone manufacturing.

India benefits from Apple's production relocation

For many years, the majority of Apple's iPhone production took place in China. In recent years, however, the company has begun to distribute its manufacturing more widely across other regions.

This trend accelerated particularly last year when US President Donald Trump introduced new trade tariffs as part of his global tariff dispute. As a result of these measures, Apple intensified its efforts to partially relocate production from China to other countries.

India has become one of Apple's most important new production locations. According to a report published earlier this week, roughly a quarter of all iPhones are now assembled in India. This means the country has quickly become a key component of Apple's global production strategy.

The Production-Linked Incentive (PLI) Scheme

A key factor in the growth of smartphone manufacturing in India is the government's Production-Linked Incentive (PLI) Scheme.

This program offers financial incentives to companies that manufacture smartphones in the country. The incentives are designed to encourage international manufacturers to establish or expand production capacity in India.

The PLI program enabled companies to significantly expand their manufacturing. Apple and its production partners also benefited from these financial incentives, which facilitated the rapid expansion of iPhone production in the country.

New funding program after the end of the PLI system

However, the current PLI program for telephone manufacturing expires at the end of this month. To avoid jeopardizing the production boom, the Indian government is already planning a new support model.

According to a Reuters report, India is working on new incentives to take effect immediately after the current program expires. The government is exploring various options to encourage companies to continue manufacturing in the country.

A key component of the new strategy could be to link subsidies more closely to export performance. Companies would then receive financial benefits if they not only manufacture smartphones produced in India for the local market, but also export them internationally.

This approach could help to establish India more firmly as a global production center for electronics.

Apple's further production plans

The timing of the new funding plans is noteworthy. Reports indicate that Apple plans to relocate roughly half of its total iPhone production to India within a year.

However, a legal decision in the United States could influence this development. A US court recently declared the so-called fentanyl-related tariffs on China invalid. Should this decision stand, the economic pressure on companies to relocate production capacity from China could decrease.

Nevertheless, India remains an attractive location for smartphone manufacturing.

Strong growth in Indian smartphone production

The development of smartphone production in India clearly demonstrates the sector's significant growth. According to Reuters, the country produced mobile phones worth nearly 60 billion US dollars in the 2024-2025 fiscal year.

Compared to the situation a decade ago, this represents a 28-fold increase in production output.

This development is part of a comprehensive economic policy strategy by the Indian government. Under the leadership of Prime Minister Narendra Modi, the country is pursuing an agenda to strengthen domestic industry.

A key objective of this strategy is to increase India's total electronics production to US$500 billion by fiscal year 2030.

Consultations with industry

As part of the planning of new support measures, the Indian Ministry of Electronics and Information Technology has already held talks with industry representatives.

These consultations are intended to help develop the structure and specific conditions of the new funding program. However, official details about the final design have not yet been published.

India is becoming an important location for Apple and the electronics industry

India's growing role in global smartphone production demonstrates the profound transformation of the international electronics industry. Apple is increasingly expanding its production infrastructure outside of China, while India is strategically establishing itself as a long-term manufacturing hub for technology companies.

With new support programs and a clear industrial policy strategy, the government aims to further expand existing growth. If the plan is successfully implemented, India could play an even more significant role in Apple's global supply chain and the entire electronics industry in the coming years. (Image: Shutterstock / PradeepGaurs)