India is considering new manufacturing incentives in an effort to shift production of the iPhone and other smartphones out of China, and to stall any move to move it to the US.
Officials in New Delhi are working on a new version of India's production-linked incentive program. The subsidy program, which has been crucial in attracting smartphone manufacturing, will expire in March 2026.
The program helped attract major manufacturers, and the next phase could tie incentives more closely to export performance. The policy reflects India's growing role in Apple's supply chain as the company steadily increases iPhone production outside China.
India prepares new incentives for smartphone manufacturing
Reported by Reuters, India's government is consulting with smartphone makers about a new subsidy program to boost domestic electronics production. The previous production-linked incentive program was worth about $21 billion and accelerated the growth of smartphone factories nationwide.
Officials are considering tying future incentives to export volumes. The policy would encourage manufacturers to assemble phones in India for shipment to global markets.
The new program could apply to investments beginning in April 2026.
Smartphones have become a centerpiece of Prime Minister Narendra Modi's broader push to expand domestic manufacturing. India aims to grow its electronics sector to $500 billion annually by 2030.
Apple's iPhone production in India has grown rapidly
Apple began assembling iPhones in India in 2017 with the iPhone SE before gradually expanding to current-generation devices. Contract manufacturers including Foxconn, Tata Electronics, and Pegatron now assemble multiple iPhone models in the country.
Large manufacturing hubs are concentrated in the states of Tamil Nadu and Karnataka.
Production has grown quickly as Apple shifts more iPhone manufacturing outside China. China still produces the majority of the world's iPhones, but India's share has expanded sharply in recent years.
Production has grown quickly as Apple works to diversify iPhone manufacturing beyond China
Industry estimates suggest India now accounts for roughly a quarter of Apple's global iPhone output after production surged in 2025. Apple assembled about 55 million iPhones in India that year, up from roughly 36 million in 2024.
The expansion reflects Apple's long-running strategy of reducing reliance on China by building additional manufacturing capacity elsewhere.
India is becoming a major export hub for iPhones
Exports have fueled much of India's recent smartphone manufacturing growth. The country produced nearly $60 billion worth of mobile phones in fiscal year 2024-2025.
Apple's iPhone supply chain accounts for a significant share of those exports. Most of the iPhones made by Apple's suppliers in India are shipped overseas, especially to the United States.
In some recent shipments, most iPhones produced at Foxconn's Indian facilities were exported to the United States, according to supply-chain reports.
Apple has accelerated the shift as trade tensions and tariffs complicate manufacturing in China. The company wants to assemble most iPhones sold in the United States in India by the end of 2026.
India offers scale but China still dominates Apple's supply chain
India's rapid growth in iPhone manufacturing doesn't mean China is disappearing from Apple's supply chain. China still handles the majority of iPhone production and has the most extensive electronics manufacturing ecosystem.
Many key iPhone components are still manufactured in China before final assembly takes place elsewhere. Replicating the scale and supplier density of China's manufacturing base will take years.
Analysts say manufacturing in India can also be slightly more expensive than in China because many components must still be imported. Industry estimates suggest final assembly in India can be about 5% to 10% more costly.
Most iPhones produced at Foxconn's Indian facilities were exported to the United States
Government incentives help offset some of those costs. Subsidies and tax policies have encouraged Apple's suppliers to expand factories and increase production capacity across India.
India's proposed incentives arrive as Apple increasingly splits iPhone production between China and India. China remains the center of Apple's manufacturing network, but India is becoming the second major iPhone production base.
Suppliers like Foxconn and Tata are expanding their facilities as Apple moves more assembly capacity to the country. Government subsidies tied to exports are designed to help India capture more smartphone manufacturing shifting out of China, and to combat the "Made in USA" shift that the Trump administration is trying to launch.
The policies encourage companies to manufacture smartphones in India for global markets. India's new incentive program aims to strengthen the country's role as both a production center and an export hub for Apple's iPhone supply chain.
