In a significant boost to India’s electronics manufacturing ambitions, Apple’s top iPhone suppliers operating in the country—Foxconn Hon Hai India, Wistron Infocomm Manufacturing (now under Tata Electronics), Pegatron Technology India, and Tata Electronics—have officially crossed the 20% Domestic Value Addition (DVA) threshold for iPhone assembly. This milestone qualifies them for enhanced incentives under the Indian government’s Production Linked Incentive (PLI) scheme for mobile phone manufacturing.
This development not only affirms Apple’s commitment to strengthening its production footprint in India but also underlines the country’s growing relevance in global tech supply chains amid shifting geopolitical dynamics and diversification away from China.
Strategic Shift in Global Manufacturing
For years, China remained Apple’s primary manufacturing hub. However, global supply chain disruptions, U.S.-China trade tensions, and pandemic-era risks accelerated the company’s strategy to diversify production. India, with its vast labor pool, government incentives, and improving infrastructure, has emerged as a serious alternative.
According to official documents reviewed by Business Standard, all four of Apple’s contract manufacturers now meet or exceed the DVA benchmark across the entire iPhone lineup currently assembled in India. The 20% DVA target had been a key eligibility requirement under the PLI scheme, which incentivizes incremental investment and local sourcing.
Value Addition Through Localization
The vendors have successfully localized a range of components and services. These include metal enclosures, mechanical parts, packaging materials, and certain modules, including batteries and camera components through Tier-2 and Tier-3 suppliers. Notably, Tata Electronics has scaled up its precision engineering capabilities for producing key iPhone components in-house.
While core chips and OLED displays are still largely imported, the progress made in localizing other high-value parts represents a significant step forward. Several suppliers have also forged partnerships with domestic manufacturers to deepen backward integration.
INR 1.5 Trillion in Exports: A Record-Setting Fiscal Year
India exported iPhones worth over ₹1.5 trillion (~$18 billion) in FY25, marking a 76% increase over the previous year. This export growth highlights Apple’s reliance on Indian production for global markets, including the United States, which is now the largest recipient of India-made iPhones.
According to industry executives, a large share of iPhones sold in the U.S. over the last two quarters were assembled in India—a development that reflects the strategic shift in Apple’s global logistics planning. The U.S. also offers tariff exemptions for India-made smartphones, further incentivizing Apple’s supply chain migration.
Implications for the Indian Economy and Tech Ecosystem
India’s success in reaching this DVA milestone holds broader implications for the country’s manufacturing-led growth story. Apart from attracting high-value investments from global majors like Apple, the move paves the way for:
Job creation in advanced electronics and precision manufacturing
Upskilling of the workforce in semiconductor packaging, component design, and automation
Supply chain development, benefiting MSMEs and Tier-2 vendors
Export diversification beyond traditional sectors like textiles and pharmaceuticals
This momentum also places India in a favorable position for future Apple product lines, including iPads and MacBooks, with talks already underway to expand production capacity in Tamil Nadu and Karnataka.
A Policy Win for ‘Make in India’
From a policy perspective, this milestone is a validation of the Indian government’s multi-pronged strategy. The ₹41,000 crore PLI scheme for large-scale electronics manufacturing, launched in 2020, has acted as a catalyst in attracting global players while enforcing value creation within the country.
The Ministry of Electronics and IT (MeitY), in collaboration with state governments, has also focused on streamlining logistics, easing compliance burdens, and establishing Electronics Manufacturing Clusters (EMCs) to support ancillary industries.
This proactive policy approach has helped India emerge as a reliable partner for global electronics brands. It also reinforces India’s ambition to scale from assembly to full-stack manufacturing—eventually capturing a higher share of the $1.2 trillion global electronics market.
Challenges Remain, But the Trajectory Is Clear
Despite the positive developments, challenges remain. India still depends on imports for advanced semiconductors, display panels, and high-end camera modules. Logistics costs, power reliability, and customs delays also remain areas for improvement.
Nonetheless, the trajectory is clear: India is no longer just a low-cost assembly destination. It is transforming into a serious global manufacturing hub with increasing technical sophistication and a broader role in the value chain.
Apple’s vendors reaching the 20% domestic value addition threshold marks a significant inflection point—one that could pave the way for deeper integration, not just for smartphones but for a broader spectrum of high-end consumer electronics.
