New Delhi: Apple’s India story has changed significantly over the past decade. The company is no longer simply importing iPhones into one of the world’s fastest-growing smartphone markets. It has built a large manufacturing and supplier ecosystem in the country, expanded production rapidly and is increasingly using India as an export base. Yet for Indian consumers, one part of the story remains difficult to reconcile: iPhones continue to carry a substantial price premium over the US and several other markets.
The latest launch brings this contrast into focus. Apple has priced the iPhone Duo at Rs 2,99,900 in India, while the new iPhone 18 Pro series is also considerably more expensive in the country than in the US. The difference becomes particularly significant when viewed against the scale of Apple’s manufacturing operations in India.
Apple began assembling iPhones in India in 2017 and has steadily expanded its production network. In 2025, around 55 million iPhones were assembled in the country, compared with about 36 million in 2024. India has consequently moved from being primarily a sales market to becoming an important part of Apple’s global manufacturing strategy as the company seeks to diversify its supply chain beyond China.
This expansion has taken place alongside substantial government support for electronics manufacturing. Production-linked incentive schemes have helped attract large manufacturers and encourage production in India, while the newly notified Rs 62,500-crore Mobile Phone Manufacturing Scheme is aimed at increasing production, domestic value addition and local sourcing. Under the scheme, eligible companies can receive incentives ranging from 2.25% to 5% of eligible sales, with an additional incentive of up to 1.5% for sourcing specified components domestically, including display and camera modules, enclosures, batteries and USB cables.
The policy objective is increasingly moving beyond simply getting companies to assemble phones in India. The larger ambition is to develop a deeper component ecosystem, retain more value within the country and make India a globally competitive electronics manufacturing base.
Apple is a major beneficiary of that transition. Its growing production footprint gives the company access to manufacturing capacity, suppliers, skilled labour and a policy environment designed to support scale. It also allows Apple to use India not only to serve the domestic market but increasingly to export iPhones to other countries.
The consumer side of this equation, however, looks different. Local assembly does not mean that an iPhone is entirely made in India. High-value components continue to come through global supply chains, while GST, logistics, distribution, currency movements and other market-specific costs affect retail prices. A direct comparison with the US also needs to account for the fact that advertised US prices generally exclude state sales taxes.
These factors explain part of the price difference, but they do not entirely resolve the question around Apple’s pricing strategy. As the company increases local production and benefits from an ecosystem that has been strengthened by government incentives, the extent to which those efficiencies are reflected in the Indian retail price becomes increasingly relevant.
Apple, after all, retains considerable control over how it prices its products across markets. Government incentives can make manufacturing in India more attractive, but they do not determine the price at which Apple ultimately sells an iPhone. This creates an important distinction between the success of India’s manufacturing policy and the value that Indian consumers receive from it.
The issue becomes even more relevant as India’s electronics policy enters its next phase. The new manufacturing scheme specifically seeks greater domestic sourcing of components, while the government is encouraging companies to move further up the value chain. At the same time, Electronics and IT Minister Ashwini Vaishnaw has indicated that Apple could expand its Indian manufacturing operations beyond iPhones, while Google is also looking at India as a major export-oriented manufacturing base as it diversifies production away from China.
For Apple, therefore, India is becoming much more than a market in which to sell premium smartphones. It is becoming an important manufacturing and export hub. That gives the company a significant strategic interest in the success of India’s electronics ecosystem, just as India has an interest in attracting and retaining companies of Apple’s scale.
The question around pricing consequently deserves to be viewed within this larger relationship. India is providing the policy support and increasingly the industrial capacity to make the country a more competitive electronics manufacturing destination, while Apple is expanding production and gaining a larger role for India in its global supply chain. As localisation deepens, the expectation that some of those gains should translate into greater value for the Indian market will also become stronger.
Apple’s manufacturing expansion is an important success for India’s Make in India strategy, but production numbers alone cannot tell the entire story. The longer-term measure will be whether deeper localisation creates a more competitive ecosystem and whether the economic benefits of that ecosystem extend beyond Apple’s factories and exports to the Indian consumer as well.
BI Bureau
