Apple’s India move is a wake-up call for enterprises to de-risk supply chains

Apple’s move to manufacture iPhones in India significantly boosts the ‘Make in India’ initiative, even as it navigates complex geopolitical headwinds. Boasting a valuation of over $3 trillion and revenues of $391.04 billion in 2024, Apple remains an industry bellwether whose strategic decisions resonate broadly across the global market. The iPhone is central to Apple’s dominance, representing 51.4% of its revenues, and is the device of choice for millions worldwide. Currently, approximately eight to nine out of every 10 iPhones originate in China, making Apple’s decision to source most US-bound iPhones from India by 2026 a pivotal move. For enterprises navigating global supply chains and geopolitical risks, this signals a critical shift toward diversification, underscoring India’s growing prominence as a global manufacturing hub.

China + 1 shift is a strategic imperative for enterprises

When the COVID-19 pandemic spread, shuttering factories across China and the rest of the world, enterprises realized that concentrating most of their production activities in China posed significant concentration risks. The need for a China + 1 strategy became not just desirable but a strategic imperative. However, supply chains are inherently complex, and moving them is easier said than done.

The need for enterprises to diversify their supply chains is twofold:

• Concentration risk: With most of the supply chain and manufacturing running through China, companies risked having their operations concentrated in the country and dependent on it. The effects of this were seen during the pandemic.
• Geopolitical risks: Western governments have had security concerns that pre-date the pandemic. For example, the US government-initiated measures banning government use of Huawei and ZTE technologies by the government in 2018, measures that were subsequently expanded in most Western countries.

It must be noted that geopolitical risks take on a greater sense of urgency given the current tariff and trade war-like situation that persists globally and the plethora of directions trade talks between China and the US may take. In the 2025 HFS Pulse study, enterprises stated that the number one external factor impacting their ability to deliver is geopolitical factors.

Exhibit 1: Geopolitics ranks at the top of enterprise concerns

Source: HFS Pulse survey 2025, N=305

India emerges as an alternative manufacturing hub with PLI schemes

In 2020, India launched the Production Linked Incentives (PLI) program to boost domestic manufacturing, employment, and import substitution. Companies participating in the program receive direct financial incentives tied to sales or production volumes achieved, reducing their cost of production. The plan targets sectors such as high-tech and IT hardware, pharmaceuticals and medical devices, automobiles, renewables, telecom, networking products, and textiles. The growing tech-savvy market is expanding to areas such as drones, semiconductors, and AI.

Among Apple’s key competitors, Samsung has built the world’s largest mobile manufacturing plant in Noida, doubling its annual production capacity from 68 million to 120 million phones. This factory is part of the company’s ‘Make for the World’ strategy, producing phones for India and other countries in the SAARC region and beyond.

Among other investments secured under the PLI scheme, Foxconn, a key Apple supplier from Taiwan, has invested over $1.5 billion in India and partnered with HCL to set up a semiconductor plant. Pegatron and Wistron, also Apple suppliers, have established iPhone assembly units. Rising Stars Mobile (a Foxconn subsidiary) and Padget Electronics (a subsidiary of Dixon Technology) have also received incentives under the smartphone PLI. In the IT hardware segment, Dell, HP, and Lenovo are among those that have committed to manufacturing tech hardware locally.

Apple’s partners have expanded their presence in India in anticipation of increased volumes

Apple’s partners, who play a key role in manufacturing its smartphones, have undertaken substantial investments in India in the past few years.

• Foxconn, Apple’s primary contract manufacturer, has significantly expanded its operations in India. In November 2023, the company announced a $1.54 billion investment to support its operational needs in the country. It has also announced a $433 million investment in a joint venture with HCL Group to build a semiconductor plant that will be operational by 2027. The facility will manufacture Foxconn’s display driver chips, which are used in mobile phones, laptops, automobiles, PCs, and other consumer electronics.
• Tata Electronics has emerged as a key part of the Apple ecosystem. In October 2023, it acquired Wistron’s iPhone facility in Karnataka’s Narsapura for $125 million, and it now contributes approximately 26% of India’s total iPhone output. It also acquired a 60% stake in Taiwanese contract manufacturer Pegatron’s India unit, which operates an iPhone plant in Tamil Nadu, India, and accounts for 10% of local iPhone production.

So, while the move to ramp up production from India may make headlines, Apple has been making moves to grow its ecosystem in India. In addition to providing a manufacturing base, India also represents a significant growth market for Apple and other enterprises looking to expand their manufacturing footprint. It is the world’s fourth-largest economy and is clocking 6%+ growth rates at a time when most countries are clocking nominal growth rates.

A lot may yet depend on India-US trade negotiations

In remarks made on his Middle Eastern Presidential visit, President Donald Trump stated, “I said to Tim, I said, ‘Tim, we treated you really good, we put up with all the plants that you built in China for years, now you got to build us,” Trump recounted. “We’re not interested in you building in India, India can take care of themselves.”

While it is possible that the remarks are made to gain leverage in trade negotiations between India and the US, it puts a cloud on the largely positive Apple-India production story. Multiple US administrations have pursued growing their relationships with India, which provides hope that the current tensions/concerns will ease negotiations.

A few days after the remarks, Walmart in the US was on the receiving end as it stated that it would increase prices on the back of tariffs, with the President stating that they should absorb the tariffs. While enterprise investments have always followed the priorities of their host country, American companies have typically enjoyed autonomy in deciding where to invest and what to invest. In the new normal, the threat of tariffs and companies being told what to do has increased. However, the remarks notwithstanding, diversifying risk in supply chain is a move that is prudent for enterprises.

India’s manufacturing push is an imperative for the country as Services-as-Software reduces demand for engineers

“India has five years to take advantage of the changes in the supply chain that are happening because of China+1.”

– World Bank President, Ajay Banga

India’s ‘Make in India’ initiative has recorded substantial wins, but the momentum must continue with further reforms. Reducing bureaucratic hurdles, simplifying labor laws, enhancing logistics infrastructure, and ensuring policy consistency are critical steps India must take to firmly establish itself as a leading manufacturing hub. With competitors such as Vietnam and Indonesia aggressively pursuing similar strategies, India’s window to capitalize fully on the China+1 opportunity is limited. For example, Vietnam has attracted significant investments in electronics manufacturing from firms such as Samsung, LG, and Intel.

There is added urgency for India as demand for software engineers from India’s traditional IT sector giants may decrease on the back of the move toward Services-as-Software. As an increasing number of L1 and L2 roles get automated, the need for engineers in bulk is set to decrease. IT sector companies reported drops in headcount for seven consecutive quarters until 2024. While start-ups and GCCs will help in providing demand, it is imperative that the manufacturing push keeps up its momentum so that the country keeps growing.

The Bottom Line: Enterprises can’t afford supply chain complacency—Apple’s India playbook sets a precedent.

Apple’s rapid scale-up in India isn’t just a manufacturing pivot—it’s a blueprint for enterprise resilience in an era of geopolitical volatility. With concentration and compliance risks mounting in China and trade tensions threatening business continuity, enterprise leaders must act decisively. India’s combination of PLI-backed incentives, growing manufacturing capabilities, and geopolitical alignment with the West presents a viable hedge—but only for those who move fast.

Don’t wait for the next disruption. Audit your global supply chains, pressure-test your regional dependencies, and make India a deliberate part of your diversification strategy—before your competitors do.