Foxconn commits $1.5 billion to expand iPhone production in India

Foxconn, the key assembler of Apple’s iPhones, has pledged a significant investment of $1.5 billion into its Indian operations, signalling an ongoing shift in Apple’s global supply chain strategy.

The move reflects the company’s efforts to ramp up production outside of China, as it looks to mitigate risks posed by ongoing trade tensions, tariffs, and geopolitical uncertainty. This latest funding, made via Foxconn’s Singapore-based subsidiary, comes as the company expands its manufacturing capacity in southern India, positioning the country as a crucial hub for Apple’s iPhone production.

iPhone production diversification

Foxconn’s investment is the latest step in Apple’s broader push to diversify its manufacturing, which has been concentrated in China for years. As global political tensions, particularly the US-China trade war, have escalated, Apple has sought to reduce its heavy reliance on Chinese factories and shift more production to other countries.

India has emerged as a critical destination for this production shift, with Foxconn’s factories in Tamil Nadu, Karnataka, and Telangana now playing a central role in assembling iPhones for both domestic and export markets.

In the 12 months leading up to March 2025, Apple’s production of iPhones in India surged to $22 billion, a nearly 60 per cent increase compared to the previous year. A significant portion of this production is handled by Foxconn’s factory in India, which is rapidly expanding.

Tata Group, which recently acquired Wistron’s Indian operations and took over Pegatron’s local business, has also played a key role in Apple’s manufacturing strategy in India. These efforts align with Apple’s broader goal to produce a substantial portion of the iPhones sold in the United States from India by the end of next year.

Minister for Electronics and Information Technology Ashwini Vaishnaw recently celebrated a major milestone in India’s role in Apple’s supply chain. He announced that Apple had exported iPhones worth over $17.4 billion during the fiscal year ending in March 2025, underscoring the significant growth in India’s smartphone manufacturing sector. This is a part of a larger trend in India’s growing role in global electronics manufacturing, as total smartphone exports from the country crossed $23.4 billion, a 54 per cent increase over the previous year.

A strategic shift

Apple’s push to move a significant portion of its production out of China was driven by several factors, including disruptions caused by the Covid-19 pandemic, which exposed the risks of over-reliance on a single manufacturing location. Apple’s factories in China faced severe production delays during the pandemic, highlighting the vulnerability of having a large portion of its supply chain concentrated in one country.

This disruption prompted Apple to accelerate its efforts to diversify its supply chain, turning to India, Southeast Asia, and other regions as alternative manufacturing hubs.

However, despite this pivot, Apple is unlikely to fully exit China in the near future. Experts believe that while India and Southeast Asia will become increasingly central to Apple’s production strategy, China will remain a key player in the firm's supply chain due to its well-established infrastructure and workforce.

The geopolitical climate, particularly the tense relationship between the US and China, has further driven Apple’s efforts to reduce its exposure to potential tariffs. Apple and other global companies are diversifying their production locations to mitigate the risks associated with unpredictable trade policies. As part of this strategy, Apple has also increased its investments in the US.

The company has pledged to invest $500 billion domestically over the next four years and create more American jobs, although Apple currently does not produce smartphones in the US.

Despite these investments, US President Donald Trump has criticised Apple’s growing manufacturing footprint in India. Trump has publicly urged Apple CEO Tim Cook to stop building factories in India and instead focus on increasing US-based production.

Trump’s comments reflect broader concerns about the outsourcing of American manufacturing jobs and the potential impact of such shifts on the US economy. However, Apple has maintained that its strategy to diversify production is necessary to safeguard its long-term growth and ensure its supply chain is resilient to geopolitical and economic disruptions.

Local economic impact

Foxconn’s $1.5 billion investment in India is a significant vote of confidence in the country’s manufacturing capabilities and its growing role in global supply chains. Karnataka’s Minister M. B. Patil recently announced in a post on X that Foxconn’s Devanahalli ITIR (Information Technology Investment Region) near Bengaluru is on track to begin exporting iPhones to the US as early as June. This development marks a major milestone for Karnataka, positioning it as a key player in the global electronics manufacturing sector.

Patil highlighted the positive impact of this investment on the local economy, noting that the expansion of Foxconn’s operations in the state is not only strengthening its position on the international production map but also driving foreign investment and creating jobs.

(With inputs from agencies)