Apple's India manufacturing efforts expands to AirPods

Apple's work to diversify its supply chain is continuing, with assembly partners preparing to start manufacturing AirPods in India as soon as April.

Apple has gradually increased its production base in India over the years, and that expansion is set to continue. After producing iPhones in India for export to other countries, Apple is getting ready to do the same with AirPods.

According to sources of The Economic Times, Apple will be commencing manufacture of AirPods from April. The production will be taking place at a Foxconn plant located in Hyderabad, with AirPods produced at the facility intended for exports only.

The report doesn't say what models of AirPods will be produced at the plant.

The facility has apparently been in the works for a while, with Foxconn approving a Rs 3,500 crore ($400 million) fund to set up the factory back in August 2023. Reports from July 2024 pointed to Apple looking into producing AirPods charging cases in the country, while trial AirPods production in the Hyderabad facility allegedly started in December.

AirPods now represent the second product category Apple actively manufactures in India.

Diversification and Tariffs

For Apple, the shift to making AirPods in India is a continuing trend for the company. While the production of most of its products stems from China, it does build AirPods in facilities in Vietnam too.

The expansion in India makes sense for a number of reasons, as part of Apple's effort to diversify its production capabilities.

During COVID-19, it was demonstrated that the supply chain was sensitive to global events, with the possibility of factories being temporarily shut down or being imposed with onerous restrictions. This led to strains on production, and actually impacted Apple's release of the iPhone 14 Pro.

Diversification of manufacturing can also help in other areas, such as tariffs. Under the current Trump administration, U.S.-China tensions have been strained, in part due to threats from President Trump to apply tariffs on imports from many different countries, with China being a big target for the fees.

To a company like Apple, setting up a manufacturing base in another country that can be affected by lower tariffs is a good move. In effect, Apple could still preserve production in China for other countries in the world, while using products made in India for the U.S. market.

India has already worked to encourage this outcome, by cutting import taxes for circuit boards and other components used in production in February. The move is an attractive one to manufacturers like Apple, who could save not only on the import tariffs to the U.S., but on the actual production of the goods in the first place.