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Apple's iPhone exports from India rose by a third in the six months to September, reflecting India's efforts to expand manufacturing in the country and reduce dependence on China. According to informed sources, U.S. companies have exported nearly $6 billion worth of Indian-made iPhones, up a third from last year. This information was disclosed under the condition of anonymity because it is not public information. As a result, annual export value is expected to exceed $10 billion in fiscal year 2024. Leveraging local subsidies, skilled labor and advances in Indian technology, Apple is rapidly expanding its manufacturing network in India. India is an important part of the company's efforts to reduce its dependence on China, a risk heightened by tensions between China and the United States. Three of Apple's suppliers, the Taiwanese technology companies Foxconn and Pegatron and the local company Tata Electronics, assemble the iPhones in southern India. Foxconn's local branch, based outside Chennai, is India's largest supplier and accounts for half of the country's iPhone exports.

Tata Group's Salt Electronics and Software unit exported iPhones worth around $1.7 billion from its factory in Karnataka between April and September, it said. Last year, Tata acquired the Wistron unit, making it the first maker of Apple's best-selling products in India. This dollar value refers to the estimated factory price of the device, not the retail price. An Apple representative declined to comment. Pegatron also declined to comment, while spokespeople for Foxconn and Tata did not respond to requests for comment. According to the Union Ministry of Commerce, iPhones account for the majority of India's smartphone exports and helped the product category become the largest exporter to the US in the first five months of this fiscal. Five years before Apple expanded production in India, the country's annual smartphone exports to the United States were just $5.2 million.

However, Apple only holds less than 7% of the Indian smartphone market, which is held by Chinese brands like Xiaomi, Oppo and Vivo. And while the global iPhone market is still small, Apple is making a big bet. Thanks to subsidies from Prime Minister Narendra Modi's government, Apple was able to assemble its expensive iPhone 16 Pro and Pro Max models in India this year, which have better cameras and titanium bodies. The company also plans to open new retail stores in cities such as the southern tech hub of Bangalore and the western city of Pune. Last year, CEO Tim Cook opened the first Apple Stores in the financial capital Mumbai and the capital New Delhi. India's annual sales hit an all-time high in March, driven by grand openings, a marketing push for new stores, an aggressive push for online sales and a fast-growing middle class that wanted Apple products. It fell to $8 billion.

We estimate India's revenues to reach USD 33 billion by 2030, driven primarily by middle class spending power and increased use of payment plans. Apple's rising star in India contrasts with its shaky fortunes in China, whose economy has stalled due to strict Covid-19 restrictions and a welfare crisis. Apple naturally relies on China for most of its production and distribution, and India is unlikely to become its most important market anytime soon. Apple made $14 billion worth of iPhones in India in the fiscal year ending March 2024, doubling production and accelerating diversification efforts outside China. Of that, about $10 billion worth of iPhones were sold.