Apple to make over 50 million iPhones a year in India

Apple is looking to make over 50 million iPhones in India annually within the next two to three years, according to a report by The Wall Street Journal. Once the company achieves this, India would account for 25% of global iPhone production.

The company tends to achieve this by creating an ecosystem of its suppliers in India and also looks to produce additional tens of millions of iPhone units after achieving the 50 million mark, the report said, citing sources.

Despite this, China, however, will continue to remain the largest iPhone producer, accounting for over half of iPhone output.

Lately, Apple has boosted its reliance on India in recent years despite challenges including complex infrastructure and restrictive labor rules that often make doing business in India, harder than in China.

Among other issues, labor unions retain clout even in business-friendly states and are pushing back on an effort by companies to get permission for 12-hour work days, which Apple suppliers find helpful during crunch periods, the report said.

Among Apple’s lead suppliers, Taiwan-based Foxconn, believes the initial push into India has gone well and this is laying the groundwork for a bigger expansion, the report said, citing sources.

Apple is emblematic of a move among companies worried about overdependence on China to move parts of their supply chains elsewhere, most often to Southeast Asia and South Asia.

Diplomatic efforts by the US and its allies to block Beijing’s access to advanced technology and strengthen ties with New Delhi have accelerated the trend.

The first phase of a Foxconn plant under construction in the southern state of Karnataka is expected to start operating in April next year, and the plant aims to make 20 million mobile handsets annually, mainly iPhones, within the next two to three years, according to the report, citing people with direct knowledge of the construction plans.

A mega plant is on Foxconn’s drawing board with capacity similar to the one in Karnataka, although the plans are still in a nascent stage, the people said.

Apple also has chosen India as its site for a manufacturing stage for lower-end iPhones to be sold in 2025.

In this stage, known as new product introduction, Apple’s teams work with contractors in translating product blueprints and prototypes into a detailed manufacturing plan. Until now, that work was done only in China, The Wall Street Journal said.

According to the report, combined with plans for expanded production at an existing Foxconn plant near Chennai and at another existing plant recently bought by Indian conglomerate Tata, these developments signify that Apple intends to have the capacity to make at least 50 million to 60 million iPhones in India annually within two to three years.

Lately, Foxconn indicated its commitment to India by announcing that it was investing the equivalent of more than $1.5 billion in the country.