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The Collection Wed, 24 Sep 25 |
Multiple stories, multiple perspectives, one theme worth your time—every week. |
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Apple Inc is in the headlines again, which isn’t very surprising given it’s that time of the year when the American electronics giant usually launches the newest version of its flagship device—the iPhone.
This year, the new iPhone 17 is seeing more demand than ever in India, with pre-bookings for the new model nearly 20% higher than what was recorded for its predecessor, the iPhone 16, last year. Apart from the usual lines outside Apple retailers, this year is also seeing a surge in orders over quick-commerce platforms.
But these are hardly all that noteworthy when compared to what’s happening on the manufacturing side of things. Because, according to Bloomberg, Apple’s facilities in the country are, for the first time, producing all the variants of the new iPhone in India—the base model, Air, Pro, Pro Max. And not just for the Indian market.
Apple has broadened the number of local factories making iPhones after shifting the vast majority of the device’s production for the US market to India from China in a bid to lessen the impact of tariffs.
The expansion includes Tata Group’s plant in Tamil Nadu state’s Hosur and Foxconn Technology Group’s production hub close to the Bangalore airport, which have both come online recently. In a sign of Tata’s increasing role as an Apple partner, plants controlled by the local conglomerate will account for as much as half of India’s iPhone output over the next two years, said the people, who asked not to be identified discussing private manufacturing planning.
Apple Expands iPhone Production in India for US-Bound New Models, Bloomberg
One in every five iPhones in the world is now made in India. And one in every three smartphones imported into the US during the first five months of this year was exported out of India. No surprises then that electronics remain an exemption to Trump’s tariffs.
But getting here wasn’t easy. An ambitious PLI scheme, building sufficient manufacturing capabilities, skilling a proper workforce… it’s been a gruelling process, and many challenges still remain for the future. Even some inexplicable ones, like figuring out why smartphone exports to the US fell by over half between May to August even though electronics are exempt from the new tariffs.
In this week’s edition of The Collection, we look at how Apple found a place for itself in the Indian market, and how it has managed to make India a major alternative to its manufacturing base in China.
Tata Electronics has been a key partner of Apple’s manufacturing ambitions in India for years now, and it’s scaling rapidly, at significant cost.
The company’s balance sheet is already straining under the weight of its rapid expansion. In FY24, it took on Rs 9,080 crore in fresh debt, piling financial pressure onto an already capital-intensive business. This kind of bloat is typical for early-stage electronics manufacturers, but it’s a high-risk game.
This seems to have turned into an “accidental hedge” for both the American electronics giant and India, given Trump’s even more antagonistic stand against China.
Even before Trump reignited the tariff wars, Tata Sons—Tata Electronics’ parent—had pumped in fresh capital through two large rights issues. Rs 1,041 crore in August 2023 and Rs 1,100 crore in March 2024. This capital injection more than doubled the company’s equity share capital to Rs 3,961 crore, signalling the Tata group’s commitment to making this bet work.
In a story from May 2025, we explored the factors Tata Electronics is banking on for growth, how it’s scaling its operations even without being a beneficiary of the PLI scheme, and the challenges it faces—including high churn in its labour force.
Tata Electronics took a painful bet on the iPhone. Luck is doing the rest
The Tata company is bleeding for scale, but its iPhone bet has turned into a geopolitical win—despite high worker churn, rising automation costs, and profit still being far off
Churn hasn’t been the only issue. Last year, the company took a leaf out of China’s tech-manufacturing playbook to build an ‘iPhone city’ and bring in migrant labourers from across the country.
But the Chinese model ran into a very Indian problem.
Tata’s iPhone factory dorms are fully charged. But the talent it wants is out of coverage area
The US$155-billion Indian tech-manufacturing industry needs skilled talent and high productivity—something companies can’t find closer to their factories
There are other India-specific challenges, too. For example, as the share of women in electronics manufacturing rises, rather unique issues are cropping up.
For instance, women have rejected employment offers because electronic manufacturers don’t allow workers to carry any form of metal, said the talent-search firm executive quoted earlier. Complying with that would require them to remove their mangalsutra—a marker of married status among Hindu women—before entering the shop floor.
“Although companies provide safety lockers, many women consider this as a very sensitive thing,” they added.
India’s manufacturing resurgence has a people problem. Ask Tamil Nadu
As orders swell, desperate electronics makers are even hiring those who have only cleared eighth grade
There’s also been some speed bumps in the sales and distribution area.
For instance, when Apple sales started taking off in India in a big way after the pandemic, it had to deal with some angst among some of its oldest stakeholders, who were feeling left out.
Indians’ love for the iPhone is stronger than ever. But Apple retailers are not happy
While the proliferation of easy financing options and the post-pandemic “revenge buying” are driving iPhone sales in India, offline retailers—key to Apple’s success in India so far—are paying the price
Given its price tag and India’s price-sensitive market, one of the most important aspects of its sales operations in the country has been financing. As we wrote in July 2024, close to 70% of Apple products are purchased thanks to no-cost EMIs, credit cards, loans, etc.
HDFC Bank played a significant role here, as it shared an exclusive relationship with Apple from 2019 to 2024, after which the former announced a ‘temporary break’.
Apple, then, replaced HDFC with SBI and ICICI. Why?
HDFC Bank and Apple’s exclusive partnership, once the envy of lenders, is over for now
A big part of Apple’s record high sales in India is thanks to the affordability programmes it has with the likes of HDFC Bank. But the lenders pay a heavy price for it
As always, you can browse this week’s entire collection below. And do write to [email protected] if you have any thoughts and suggestions.
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Rahul leads the promotion and distribution efforts for the journalism produced by The Ken. He works at the intersection of the publication's editorial and business operations.
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