India is on course to assemble a record share of the world's iPhones in 2026, as Apple and its main manufacturing partners deepen a shift in electronics production away from China. The move, driven by both supply-chain risk and India's manufacturing incentives, has turned the country into the fastest-growing node in the global smartphone supply chain.
Apple's contract manufacturers — chiefly Foxconn, along with Tata Electronics, which acquired Wistron's Indian operations and took over Pegatron's local plant — have expanded capacity across Tamil Nadu and Karnataka. Analysts tracking the supply chain estimate that a growing portion of iPhones sold in the United States is now assembled in India rather than China, a reversal that would have been hard to imagine five years ago.
What is driving the relocation
Two forces are pushing in the same direction. The first is tariff and geopolitical risk. Companies that concentrated assembly in China have spent the past several years building alternatives, and India and Vietnam have absorbed most of that diverted investment. The second is policy. India's production-linked incentive scheme, which offers manufacturers payments tied to incremental output, has made domestic assembly meaningfully cheaper for firms that hit volume targets.
According to officials at India's Ministry of Electronics and Information Technology, smartphone exports have become one of the country's largest single export categories, with Apple's supply chain accounting for the bulk of the value. The government has framed the trend as evidence that its industrial strategy is working, while economists caution that most of the activity remains assembly rather than higher-value component manufacturing.
The component gap
That distinction matters. Assembling a phone captures a relatively small slice of its total value; the chips, displays and camera modules are still made elsewhere, largely in East Asia. India imports most of these components, which means the headline export figures overstate the domestic value added. Building a local component base — semiconductors above all — is slower, more capital-intensive, and dependent on technical partnerships that take years to mature.
New Delhi has courted chipmakers with subsidies, and several assembly-and-test facilities have been announced, but a leading-edge fabrication plant remains a long-term ambition rather than a near-term fact. Until the component layer develops, India's role stays concentrated at the final, lowest-margin stage of the chain.
Regional competition and what comes next
India is not the only beneficiary of the China-plus-one shift. Vietnam has captured significant Apple production of other devices, and its established electronics base gives it an edge in some categories. The competition between the two for the next wave of manufacturing investment is one of the defining contests in Asian industrial policy.
Separately, the durability of the trend depends partly on factors outside any single government's control. Changes to US trade policy could alter the calculus quickly, and Apple's own decisions on where to place capacity respond to costs and politics in roughly equal measure. For now, the direction of travel is clear, even if the pace remains uncertain.
Markets will be watching India's quarterly export data and any fresh capacity announcements from Foxconn and Tata for confirmation that the shift is structural rather than a temporary rebalancing. The harder question — whether India can move up the value chain from assembly to components — will not be answered this year.