The iPhone 17 may have dazzled on stage at its launch, but the real story is unfolding far from Silicon Valley, on the factory floors of Tamil Nadu and Bengaluru. For the first time, every new model, from the entry version to the Pro Max, is being assembled in India for global distribution. This isn’t just a minor supply-chain tweak. It’s a strategic move in a world shaken by trade wars and shifting geopolitics, a clear signal that relying solely on China is no longer an option.
This strategic shift has accelerated following the US — China trade conflict. And the scale is striking. Foxconn’s 300-acre site in Bengaluru will employ nearly 100,000 people, many of whom are young women trained to work on the latest iPhones. An average Indian factory, by comparison, employs fewer than 100 workers. Can you imagine the impact of this? This isn’t just a new plant; it’s a ‘mini-city’ of modern manufacturing, reflecting apple’s long — term strategy and India’s rising stature in the global tech economy.
FDI: Fueling India’s Economic Engine
What if a single investment could not only grow a business but reshape a nation’s future? Foreign Direct Investment (FDI) is much more than a statistic. Unlike fleeting portfolio investments, FDI is a long — term commitment that injects a powerful trifecta into an economy: capital, technology and invaluable management skills. Think about apple’s journey in India. In FY25, its local vendors produced a staggering $22 billion worth of iPhones. But here’s the most compelling part: 80 per cent of that output was exported. Can you imagine the impact on India’s trade deficit and its financial stability? This wasn’t just about production; it was a game — changer for the nation’s Balance of Payments, reinforcing its financial footing with every device shipped.
And what about the rupee? How could a weaker currency become a source of strength? FDI turns this paradox into reality. While a depreciated rupee initially makes a country an attractive investment destination, the subsequent large — scale inflows of foreign capital create a demand for the local currency, naturally pushing up its value. This creates a virtuous cycle where stability attracts investment, and investment, in turn, builds further stability. But perhaps the most profound impact is on a nation’s people. Studies show that multinational production can boost per capita income in developing countries by as much as 3.5 per cent. Apple’s manufacturing ecosystem alone created an astounding 150,000 direct jobs and 300,000 indirect jobs. This is a record-breaking employment boom, a testament to how global partnerships can unlock a new era of opportunity.
The PLI Scheme: A Game Changer
While ‘Make in India’ had mixed results, the Production Linked Incentive (PLI) scheme has emerged as a true game — changer. Launched in 2020, it’s a simple idea: reward performance,not promises. The government offers companies 4 to 6 per cent cash incentives for their additional sales. The results speak for themselves. Under the scheme, Apple’s suppliers have produced iPhones worth over $45 billion, with exports crossing $34 billion in just four years. The electronics sector’s output has jumped by an astonishing 146 per cent. The launch of the iPhone 17 in India is a powerful vote of confidence in the PLI framework. By aligning government incentives with the corporate need for supply chain diversity, the scheme had drawn global capital, boosted exports and positioned India firmly on the world’s manufacturing map.
The ‘china Plus One’ Strategy
Why is apple manufacturing in India, and what does it mean for the world? Geopolitical tensions and trade disputes have made centralised supply chains unsustainable, exposing firms like apple to the risks of over — reliance on a
single country. Apple’s response is a masterclass in the ‘China Plus One’ strategy: diversifying production while maintaining a core presence in China. India has emerged as the top alternative,with projections that it will contribute 15 to 20 per cent of global iPhone output by 2025. This isn’t about leaving China; it’s about smart risk management. To sidestep prospective US tariffs on Chinese — made goods, apple has shifted much of its US — bound iPhone production to India. This move isn’t a temporary fix; it’s a deliberate, long — term rebalancing of its global operations. The fragmentation of global supply chains has created a unique opportunity for India. Through its PLI scheme, the country has successfully positioned itself to attract Apple’s investment and expand its role on the world’s manufacturing stage.
The Road Ahead: Overcoming Challenges
Can India truly become a manufacturing giant? Despite Apple’s expansion, major hurdles remain. Infrastructure and logistics are still a challenge,with slow progress on initiatives like ‘Make in India’. A key barrier is skills shortages. Advanced sectors lack trained labor.
The biggest test? Supply chains. India still relies on imports for key components like semiconductors, limiting its role to assembly. Government efforts and partnerships aim to fix this, but India’s transition from an assembly hub to a manufacturing powerhouse will be the ultimate test.
Not a Replacement, But a Renaissance
The arrival of the iPhone 17 in India is a watershed moment, not just a simple business decision. It’s a symbol of a new global order, reflecting a strategic shift by a tech giant and validating India’s industrial resurgence. Can a single product launch truly change a nation’s destiny? This event proves it can, turning a geopolitical challenge into a massive economic opportunity and
providing a huge impetus to the ‘Make in India’ initiative.
The momentum is undeniable. India has gone from being on the periphery of Apple’s supply chain to becoming a cornerstone of its future. With this move, India has taken a decisive step toward shaping its own trajectory on the global manufacturing stage.
The writer is a professor of Finance at IILM Lodhi Road, New Delhi
