Iran war threatens India's smartphone exports – Apple has the advantage

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India has become one of the most important production locations for smartphones in the past year – not least thanks to Apple's massive expansion of iPhone manufacturing there. But the war in Iran now threatens to slow the export boom. However, a report by Nikkei Asia shows that Apple is less affected by the disruptions than smaller manufacturers.

India's smartphone exports are booming – until now

India's rise as an electronics exporter has been impressive in recent months. According to official data, the country exported smartphones worth around US$11 billion in the first half of fiscal year 2025/26 alone – an increase of approximately 55 percent compared to the previous year. This development aligns with the Indian government's incentive programs designed to attract international companies to India.

However, the Iran war and its impact on Middle Eastern trade hubs – particularly the United Arab Emirates – could significantly slow this growth. Analysts warn, according to Nikkei Asia, that smartphone exports from India could plummet by 22 to 25 percent in the coming weeks if the crisis worsens.

Apple is better positioned than smaller exporters

The report clearly distinguishes between large, organized brands and smaller retailers. Apple belongs to the first category and, according to analysts, is less vulnerable to the disruptions. The reason: Large manufacturers like Apple can reroute their supply chains and thus bypass the affected hubs in the Middle East.

This is no coincidence. Apple has strategically diversified its entire supply chain in recent years – from tax reforms that facilitate new investments in India, to investments in education and robotics within the Indian supply chain, to relocating entire production lines away from dependence on China. This strategic breadth is now paying off.

Smaller and medium-sized traders who handle their exports via regional hubs such as Dubai and Doha, on the other hand, are hit much harder.

Demand has remained stable so far – logistics is the problem.

One important bright spot: Demand for smartphones from India has not yet collapsed. Ahmed Shehab, a Dubai-based analyst at Counterpoint, emphasizes, according to Nikkei Asia, that the impact so far has primarily affected logistics. Companies are therefore temporarily switching to more direct shipping routes and avoiding hubs like Dubai and Doha.

As long as disruptions at the Middle Eastern trade hubs persist, export flows are likely to remain volatile. Whether a further escalation of the conflict will ultimately affect demand itself remains to be seen.

Apple's supply chain has an advantage – but no reason to sound the all-clear

The Iran war demonstrates once again how sensitive global supply chains are to geopolitical crises. For Apple, the situation is less dramatic than for many other players – years of work on a diversified production and logistics strategy are proving advantageous. India remains a key component of Apple's global manufacturing strategy, even if the export boom could stall for the time being. (Image: Shutterstock / Ringo Chiu)