In today’s Finshots we tell you why Apple is looking to expand in India and how it’s a narrative of the changing global trade.

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The Story

50%!

That’s the number analysts say India could eventually meet in supplying the world's iPhones. And that’s a big leap from 2017, when India barely featured in Apple’s global production map.

To understand this shift, let’s take it from the top.

When trade wars heat up, Apple could just bring iPhone production to the US. But it’s not that simple. Because iPhone's an assembled gadget with components from over 40 countries. And to piece that together, Apple needs a colossal workforce of trained hands and a network of specialized suppliers. But the US doesn’t have that scale. It lacks the labour. Rebuilding the entire supply chain in the US would take years and cost billions. Plus, it certainly doesn’t have the cost advantage. As per an estimate, an iPhone made in the US could cost 5x more than it would in China. And that’s perhaps the reason why Apple makes 80% of its products in China today.

But with the tariff war, Apple’s looking for a different plan. And India fits the bill. iPhone exports from India to the US are said to be about 20% cheaper than from China after the tariff changes. India also has a vast labour pool and a growing local market for iPhones. And Apple has cracked the Indian market before.

Today, 20% of its global iPhone output comes from India. Foxconn, Apple’s long-time manufacturing muscle, now runs mega assembling factories and has plans of expansion. Tata Electronics has taken over Wistron’s and Pegatron’s facilities to become major iPhone supplier.

And that makes us ask - Can India really become the next China?

Well, making iPhones is one thing. Designing, innovating, and building the core components? That’s another game entirely.

India’s innovation hasn’t picked up pace and we don’t control the high-end supply chains. Without owning more of this stack, India remains a spoke in Apple’s wheel. And the macro data reflects that. Private investment in India is just about 11% of GDP. R&D spending is stuck at a paltry 0.6% of GDP — far behind China’s 2.6%. Logistics still pose challenges, taxes remain high, policy flip-flops aren’t uncommon, and a steady stream of talent leaves the country every year.

So the key is not just to assemble the iPhone, but to eventually own more of the value chain.

And history shows us that trade conflicts can help countries do that. You see, back in the 1980s, Japan was eating into America’s dominance in cars, semiconductors, and electronics. So the US retaliated. First came the Voluntary Export Restraints on Japanese cars. Basically, Japan had to put a limit on the cars it exported to the US. Then the US and Japan signed the 1985 Plaza Accord — which made the yen dramatically stronger and its exports less competitive in the world. Japan responded by setting up more factories on US soil. And that allowed Japanese companies to maintain access to the US markets while addressing trade concerns. 

Apple’s playbook today looks similar. Diversify, de-risk, relocate. And do it fast.

And it’s not just Apple. Globalisation as we know it is being rewritten. Startups are shipping globally from day one. Chinese sellers are bypassing retail chains and selling directly to US consumer at way lower prices on TikTok shops. Stablecoins are inching closer to becoming the unofficial currency of global trade. And countries are no longer building alliances just on price, but on politics too.

So Apple’s India bet isn’t just about making cheaper phones. It’s also about staying prepared in a world where tariffs can shoot up without warning. And for India, it’s a chance to step up and start building the things the world wants.

Most of us have already lived through a bunch of market meltdowns - the dotcom bust, the 2008 crisis, and Covid. Each time, the world order shifted. Just like the global trade is shifting today. And in the coming years, there's a good chance that most of the iPhones might say ‘Made in India.’

Until then…

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