China’s Import Delays Put Apple's India Plans In Quandary

China’s Import Delays Put Apple's India Plans In Quandary

Meanwhile, Tata Electronics and Foxconn are at work to set up a new capacity to make iPhones

Mobile device companies, including Apple Inc vendors, who assemble iPhones, etc., are facing a major concern from China.

The ongoing delay in permission to import crucial machinery from China to make iPhones and for the upcoming new model could adversely impact the launch of the iPhone 17.

It could also jeopardize the plan to double production of phones to meet the entire US demand for iPhones and overcome the high import duties imposed by the United States.

The delay in providing clearance for imports is also reflected in other areas, including tunnel drilling machines, as the government works aggressively on new tunnel construction, and machines used for solar energy, apart from electronics.

A government official stated that Apple launched one new mobile phone a year compared to two by other companies. To assemble the new models in India, one must retrofit fresh imported equipment. The delay could impact the launch of new models. Also, importing secondhand machinery for assembling phones, which meant shifting capacity from China to India, would also be scrutinized.

Meanwhile, Apple is considering more than doubling the capacity of iPhone production in the country, which is expected to hit $26-27 billion by Financial Year 2025-26. It would help meet the entire requirement of the US ($40 billion) instead of exporting out of China, where higher duties of 20 percent were slapped by the US compared to zero duty from India in the next three months, which might go up to 10 percent.

In 2024-25, Apple exported iPhones worth 1.5 trillion from India, about 20 percent of which went to the US.

However, Apple vendors must soon build new capacity and import capital equipment from China. If delayed, it could put the entire plan in a quandary. This will mean a marked shift in iPhone production from China to India, which by FY 2026 is expected to account for 25 percent of the global production value of the phone.

Meanwhile, Tata Electronics and Foxconn are already at work to set up new capacity to make iPhones.

To increase localization, homegrown engineering companies are working overtime to build capital equipment according to the requirements of companies like Apple and their vendors.