India Sends $2.5 Billion in Apple Components to China as Its Manufacturing Role Expands

Indian Parts Feed Chinese Production Lines

Indian suppliers to Apple have exported a record $2.5 billion in components and subassemblies to China in fiscal year 2026, with projections putting the figure at $3.5 billion by the end of the year. The reported shipments have already exceeded the $920 million recorded in fiscal year 2025, following almost negligible exports in earlier years.

The parts include printed circuit board assemblies, mechanical housings, flexible circuit board assemblies and conductive graphite buttons. They go into Chinese factories making devices for Apple, the world's largest consumer electronics company. Indian plants that once mainly received sophisticated components from China are now supplying some of the inputs used by Chinese production lines.

The $2.5 billion figure is about 2.7 times the previous year's $920 million. Reaching the projected $3.5 billion would take the total to roughly 3.8 times that earlier level. The change gives India a larger role in making the parts inside electronic devices, alongside its growing business assembling finished products.

China remains essential to Indian electronics manufacturing, supplying a large share of the components used by its factories. The emerging trade runs in both directions: Indian manufacturers continue to buy Chinese inputs while expanding exports of their own components to China and Vietnam.

An industry executive familiar with the supply chain described growth on this scale as unthinkable when Apple began shifting iPhone production from China to India in 2021. The expansion reflects a combination of government incentives, corporate investment and spending on more advanced manufacturing capabilities, beyond the search for lower labour costs.

Which Suppliers Are Driving the Change?

Foxconn, Tata Electronics, Tata owned Pegatron Technology India, Motherson Group, Salcomp, TRIL Bangalore and Yuzhan Technology have contributed to the component shipments. Their work includes making mechanical enclosures from scratch, including casings for iPhones and other Apple devices.

A mechanical enclosure is the outer structure that holds and protects a device's internal parts. Producing it requires factories to make the housing itself, rather than simply fit imported components into a finished phone. Circuit board assemblies perform a different job: they hold and connect electronic components so those components can work together.

The exported products fall under three Harmonized System nomenclature codes, the categories used to classify goods in international trade. Shipments gathered momentum from April 2025. The specific code numbers were not given.

Indian suppliers have also started sending parts to Vietnam, another important manufacturing location in Apple's network. With exports reaching both China and Vietnam, India is becoming a more connected part of Asian electronics production, supplying other manufacturing hubs as well as assembling devices for sale.

Apple's wider strategy is to reduce reliance on any single country while increasing the amount of manufacturing value created within its different production locations. India's component exports fit that approach by adding another source of inputs to a network spread across several countries.

How Assembly Became the Starting Point

India's electronics expansion relied heavily on final assembly for more than a decade. Factories brought together imported parts, made finished devices and shipped them to customers. The Production Linked Incentive scheme, known as PLI, helped attract global brands and increase smartphone production.

Domestic value addition nevertheless remained at roughly 15 to 20 percent. Value addition means the share of a product's value created through work and inputs within the country. When most components, materials and subassemblies arrive from abroad, much of the value in the finished device is created elsewhere.

China supplied many of those imported inputs. That dependence left Indian production exposed to geopolitical disruption and transport bottlenecks, while limiting how much of the economic value stayed in India. Larger assembly volumes could therefore coexist with a relatively small domestic share of each product's value.

The Electronics Component Manufacturing Scheme, or ECMS, was launched in 2025 to address that gap. It supports domestic production of components, materials and manufacturing equipment, with the aim of building an integrated electronics manufacturing system rather than an industry centred mainly on assembly.

India's stated direction is to raise domestic value addition from around 20 percent toward 35 to 40 percent. Making more components locally is central to that effort because circuit boards, display modules, connectors and battery cells account for a substantial part of an electronic product's value.

Apple's Production Scale Gives Suppliers a Market

Apple has manufactured iPhones worth $70 billion in India over five years under the smartphone PLI programme. Exports accounted for $51 billion, or nearly 73 percent of that production. The figures show how strongly the Indian operation has developed around supplying overseas markets.

Amitabh Kant, the former chief executive of NITI Aayog, said the component exports had gone beyond what was envisaged when the smartphone incentive programme was designed:

The Apple ecosystem has started exporting components and sub-assemblies to China. This was unimaginable when the Smartphone PLI scheme was first conceptualised.

India has become the world's second largest mobile phone manufacturer. Its progress in finished phones has provided the scale from which suppliers can expand into components, including parts that can serve factories outside India.

The component business also changes the nature of India's participation in Apple's production network. A factory assembling a phone needs a steady supply of parts. A factory making those parts can sell into several assembly locations, extending its role beyond the country where the final device is produced.

Investment directed at technological upgrading is therefore a central part of the change. Producing more sophisticated inputs requires capabilities that go beyond bringing imported parts together, including precision engineering and tighter control of manufacturing processes.

Seven Projects Target Circuit Boards and Cameras

India's electronics policy rests on three connected programmes. PLI supports scale in finished goods, the semiconductor initiative seeks capabilities in chip fabrication and packaging, and ECMS addresses the components and materials between those stages. Together, they are intended to support a more complete manufacturing system.

The government has approved seven ECMS projects, providing grants worth 55.32 billion rupees, or $626 million. The plants will establish local production of camera modules, multilayer printed circuit boards and advanced high density circuit boards used in smartphones, wearable devices and medical equipment.

Printed circuit boards provide the connections between electronic parts. Boards with several layers or a high density of connections allow more circuitry to fit into compact devices. Camera modules bring together the parts needed for a device's camera, making them another important input for smartphone manufacturing.

Ashwini Vaishnaw, the minister for electronics and information technology, described how much domestic demand the seven plants would supply and how much of their production would go abroad:

20% of our domestic demand of PCBs and 15% of Camera Module sub-assembly will be met through production from these [seven] plants, with about 60% of total production from these plants being exported.

The planned output combines two goals: replacing some imported components used in India and building a business supplying overseas customers. The projects sit within a wider ECMS effort covering consumer electronics, automotive uses and strategic sectors.

Investment Interest Extends Beyond the First Plants

ECMS has received 249 applications from Indian and international companies, with proposed investment commitments of 1.15 trillion rupees, nearly $14 billion. The seven approved projects are the beginning of a broader effort to establish domestic component production.

Industry projections put India's electronics components market at $150 billion by 2030 and its wider electronics market at $500 billion. The component figure would represent 30 percent of the larger market projection, showing the scale of the business targeted by suppliers and policymakers.

Reaching those levels requires sustained investment in skills and technology. Component manufacturing draws on materials science, precision engineering, process control and automation. Factories need to produce parts consistently enough for those parts to work in devices assembled elsewhere.

The expansion is expected to create tens of thousands of direct jobs requiring greater technical proficiency. Those manufacturing skills can also provide a foundation for more advanced design and research work, extending the activity carried out within India.

Control over important inputs affects production costs, technical capabilities and the ability to keep factories running when supplies are disrupted. Establishing component production closer to Indian assembly plants can reduce reliance on imports and shorten supply routes, while exports give suppliers access to a wider market.

Trade Tensions Add Pressure to Diversify

US President Donald Trump's tariffs of 125 percent on Chinese goods have added pressure on suppliers to diversify their production locations. Reduced American demand and surplus inventory have also pushed Chinese electronics component makers to offer Indian companies price reductions of up to 5 percent during contract negotiations.

The trade environment has accelerated the China Plus One strategy. Under that approach, companies keep production in China while developing another manufacturing base to reduce their exposure to disruption in a single country. India's expanding electronics industry has benefited from that search for additional locations.

In the quarter ended September 2025, India overtook China as the largest smartphone exporter to the United States. India fulfilled approximately 40 percent of American demand previously supplied by Chinese manufacturers.

US smartphone imports from India increased by roughly $15 billion, while imports from China fell by around $18 billion. Those changes show the scale of the shift in American purchasing alongside India's growing position in phone production.

Chinese suppliers' discounts present Indian manufacturers with a practical choice. Cheaper imported parts can lower the cost of producing devices now. Investment in Indian component plants serves the longer term goal of creating more value domestically. Suppliers must manage both pressures as local capacity expands.

China Still Supplies Much of India's Electronics Industry

China continues to account for nearly a third of global electronics exports. Its position remains much larger than India's emerging component export business, and Indian factories still depend heavily on Chinese inputs for their own production.

India's electronics imports reached $116 billion in fiscal year 2026, compared with exports of $48 billion. The difference is $68 billion, and the import bill is about 2.4 times the value of exports. Growing sales abroad are occurring alongside a much larger flow of electronics into the country.

Chinese suppliers provide approximately 75 percent of the electronic components used in Indian manufacturing. In the fiscal year 2025 component import bill of $36.8 billion, nearly 40 percent came from China and more than 16 percent from Hong Kong.

The $2.5 billion in component exports to China is therefore a major change in the direction of trade, while imported components continue to play a central role in Indian production. The previous year's $36.8 billion component import bill illustrates the scale of the domestic production gap that ECMS is intended to address.

Bureau of Indian Standards approval requirements for overseas sourcing, introduced through quality control orders, and rising import duties on components have encouraged local manufacturing. Building the capacity to meet that demand takes time, especially for products requiring advanced processes and consistent quality.

The Dates Behind the Manufacturing Shift

India's current component exports follow several years of changes in Apple's production network and government manufacturing support. The main developments span the move into iPhone assembly, the launch of component incentives and a shift in smartphone trade with the United States.

• 2021: Apple began shifting iPhone production from China to India.
• April 2025: Indian exports of components and subassemblies to China gathered momentum across three trade classification codes.
• 2025: India launched the Electronics Component Manufacturing Scheme to support components, materials and manufacturing equipment.
• Quarter ended September 2025: India overtook China as the largest smartphone exporter to the United States.
• Fiscal year 2025: Component exports to China stood at $920 million, while India's electronic component imports totalled $36.8 billion.
• Fiscal year 2026: Indian Apple suppliers recorded $2.5 billion in component exports to China, with a projection of $3.5 billion by year end.
• 2030: Industry projections place India's components market at $150 billion and its wider electronics market at $500 billion.

The milestones show assembly growth and component production developing at different stages. PLI helped create large production volumes first. ECMS is intended to deepen the domestic supply base that supports those volumes and supplies other manufacturing locations.

More Complex Components Are the Next Test

Indian component manufacturers face strong competition from established Chinese suppliers seeking to protect their market share as tariffs weaken demand. Discounts of up to 5 percent add pricing pressure at a time when Indian companies are investing in new plants and technical capabilities.

The next phase depends on whether India can extend its smartphone assembly success into more complex products, including semiconductors and advanced displays. Those categories would deepen the country's role in electronics production beyond the enclosures, circuit board assemblies and other parts already being exported.

The seven approved ECMS projects and the wider pool of 249 applications show substantial interest in that expansion. Their importance lies in turning proposed investment into production that can serve Indian demand and compete for export orders.

India's growing sales of Apple components to China mark a change in its manufacturing role. The larger task is to build enough local capability that rising finished product exports are supported by a stronger domestic component industry, while keeping access to the international suppliers on which factories still rely.

Key Points

• Indian Apple suppliers exported $2.5 billion in components to China in fiscal year 2026, compared with $920 million in fiscal year 2025. The projected year end figure is $3.5 billion.
• Foxconn, Tata Electronics, Pegatron Technology India, Motherson Group, Salcomp, TRIL Bangalore and Yuzhan Technology have contributed to shipments. Suppliers also export parts to Vietnam.
• Apple manufactured $70 billion worth of iPhones in India over five years under smartphone PLI, with $51 billion exported.
• Seven approved ECMS projects carry grants of 55.32 billion rupees, or $626 million, for production including camera modules and advanced circuit boards.
• ECMS received 249 applications proposing investment of 1.15 trillion rupees, nearly $14 billion.
• India became the largest smartphone exporter to the United States in the quarter ended September 2025.
• India's fiscal year 2026 electronics imports of $116 billion exceeded exports of $48 billion. Chinese suppliers still provide about 75 percent of components used in Indian manufacturing.
• Chinese component suppliers are offering price reductions of up to 5 percent amid trade pressure and surplus inventory.