Apple’s India Ambitions Gain Momentum As Foxconn Invests $1.5B In Local iPhone Assembly Arm

As Apple (AAPL) struggles to resolve supply chain issues amid ongoing tariff uncertainties, its supplier, Hon Hai Precision Manufacturing, aka Foxconn, has increased investment in its Indian subsidiary.

In a filing with the London Stock Exchange, Yuzhan Technology Ltd, Foxconn’s India unit located in Tamil Nadu, which manufactures electronic components and assembles iPhones, said another Foxconn Singapore has bought $1.49 billion worth of its shares.

The number of shares purchased was 12.77 billion valued at INR. 10 per share. 

The development comes amid Apple’s rumored move to shift U.S.-bound iPhone production from China to India as a workaround for the China tariffs.

Since then, the U.S. has struck a deal with China to suspend the implementation of the hefty 145% tariff levied on Chinese imports. 

Last week, U.S. President Donald Trump, while speaking at an event during his state visit to the Middle East, said he had asked Apple CEO Tim Cook to refrain from using India as a production base, citing the prevailing high tariffs. 

According to Morgan Stanley analyst Erik Woodring’s estimates, India currently produces 30 million to 40 million units of iPhones, out of which over 12 million are earmarked for domestic sales.

At the midpoint of the India output estimate and accounting for Indian sales, Apple may have to augment its iPhone production in India by about 37 million units, or double the capacity.

Apple’s India plans may also be stymied because the company may still rely on China for most of the components of the iPhones assembled in India.

Wedbush analyst Daniel Ives said in a Friday note, "Cupertino's aggressive push towards India production has been a very  smart strategic move given the uncertain tariff environment facing Apple in China.”

“We believe that Apple could ramp iPhone assembly production in India up to 60%-65% by the Fall in a best-case scenario, but could easily pivot back to a China-driven iPhone strategy depending on the tariff situation and deal negotiations.”

The analyst said Apple would not consider making iPhones in the U.S., given that doing so would push up the price point to $3,500 and the transition would take many years.

The Apple stock ended Monday’s session down 1.17% at $208.78, taking its year-to-date losses to over 16%.

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