India's Challenge to Sustain Apple Investment Amid Changing Geopolitics
Can India keep pace with geopolitics and attract more Apple investment?

Image: Business Standard
India's iPhone production surged in FY26, driven by US-China tariff tensions that favored Indian manufacturing. However, with the recent US Supreme Court ruling eliminating tariffs on Chinese imports, Apple faces challenges in maintaining its momentum in India. The Indian government must implement competitive policies to attract further investment and build a robust supply chain.
- 01In FY26, Apple's iPhone exports from India reached a record ₹2 trillion (approximately $21 billion), a 33% increase from the previous year.
- 02Apple's production in India accounted for 36% of the cumulative iPhone production value over five years, surpassing its production-linked incentive target by 180%.
- 03The US Supreme Court's ruling on fentanyl tariffs has leveled the playing field between India and China for iPhone production.
- 04India's share of global iPhone production is projected to rise from 23% in 2025 to 28% by 2026, with expectations of exceeding 30% in the coming years.
- 05The Indian government is urged to create a new production-linked incentive scheme to maintain competitiveness against China.
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In fiscal year 2026, India experienced a significant boom in iPhone production, largely attributed to the US-China tariff tensions that prompted Apple Inc. to shift production from China to India. Under the leadership of CEO Tim Cook, Apple capitalized on a 20% tariff on Chinese imports, allowing India to export iPhones to the US duty-free. This strategic move resulted in India accounting for 36% of the cumulative iPhone production value over the past five years, with exports reaching a record ₹2 trillion (approximately $21 billion). However, recent changes in US trade policy, including the Supreme Court ruling that eliminated tariffs on Chinese imports, pose challenges for India's continued growth in this sector. As Apple faces a more level playing field with China, the Indian government must respond with competitive policies and incentives to sustain investment and develop a robust domestic supply chain. Analysts predict that India's share of iPhone production could rise to 28% by 2026, but achieving this will require overcoming significant obstacles, including higher production costs and logistical challenges. The Indian government is now tasked with creating a new production-linked incentive scheme to ensure that India remains an attractive destination for Apple and other tech manufacturers.
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The Indian government's ability to implement supportive policies will directly affect the local economy, particularly in the tech manufacturing sector.
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