Apple Moving Half Of Supply Chain From China To India, To Employ 5 Lakh People In 3 Years

As Apple continues to increasingly distance itself from China and invest in India, the Cupertino-based company is reportedly moving at least half of its existing supply chain from China to India.

As per ET’s report, Apple’s ecosystem of component makers and suppliers could collectively employ around 5 Lakh people in India directly over the next three years, marking an over three-fold increase.

The tech giant also aims to ramp up the local value addition from its India suppliers in line with its plans to shift the vendor base outside China. 

“In China, (Apple) has the highest domestic value addition in the world, which is 28%. The value-add (in India currently) is around 11-12% and is expected to go up to between 15% and 18%,” the report said, citing sources in the company. 

To this, Neil Shah, vice president at Counterpoint Research added that with the right investments, Apple can potentially increase the value addition from the Indian ecosystem to more than 20% from the current 14%. 

Apple’s growth curve in India seems to have moved upward over the last few years. The latest report surfaced a day after the company was reported to have manufactured iPhones worth $14 Bn in the country. 

According to media reports, Apple makes 14% of its flagship devices in India, which translates to about 1 in 7 iPhones. Taiwanese manufacturers Foxconn and Pegatron have majorly helped Apple in boosting its production output in India. While Foxconn assembled nearly 67% of the India-made iPhones, Pegatron Corp contributed about 17%.

To boost the production in India, Apple is also taking other measures such as offering residential facilities to the factory workers in line with its industrial housing models seen in China and Vietnam. Under this plan the vendor ecosystem is likely to construct over 78,000 units. 

Looking at the Indian market, CEO Tim Cook attributed the growth in the country to iPhone sales and higher adoption of its products by enterprises. Apple accounted for 23% of smartphone revenue share in 2023, despite capturing just around 6.5% market share by volume. 

In February, Apple India crossed the significant sales milestone of $8 Bn. This marks the second consecutive year in which the iPhone maker has experienced sales growth exceeding 40%. To expand more in the retail space, the smartphone giant came up with two official stores in the country last year. 

Apple’s India business recorded revenue of INR 49.3K Cr in FY23, an increase of 48% from INR 33.3K Cr in the previous fiscal year.

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