India has made iPhone manufacturing more attractive by eliminating import duties on key smartphone components, lowering costs for companies assembling devices in the country.
India on July 9 removed import duties of 5% to 7.5% on several components used to manufacture smartphones and other electronics. Covered parts include wireless charging modules and lithium-ion cells.
Reuters reported that the exemptions remain in effect through March 31, 2029. The policy could benefit companies including Apple, whose manufacturing partners have steadily expanded iPhone production in India as the company diversifies its global supply chain.
Because the duty cuts apply to components rather than finished smartphones, manufacturers can import key parts more cheaply while continuing to assemble devices in India. The country introduced the duty cuts as part of an effort to expand its electronics manufacturing industry.
Over the past several years, the government has rolled out financial incentives and other measures to attract manufacturers, expand domestic production and strengthen India's role in the global electronics supply chain.
Lower component costs strengthen India's manufacturing appeal
Smartphones are assembled from components sourced around the world, even when final production takes place in India. Lower import duties make that supply chain less expensive while India continues building capacity for more complex, higher-value components.
iPhone AirIndia's exemptions should improve cost competitiveness, increase domestic value addition and encourage more electronics manufacturing in India. Removing duties on lithium-ion cells could also encourage more investment in battery production for consumer electronics and electric vehicles.
The exemptions remain in effect through March 31, 2029, giving manufacturers several years of policy certainty as they evaluate investments in factories, equipment and production capacity. Longer-term policy stability also reduces the risk of import costs changing before new projects begin generating returns.
Why the duty cuts matter for Apple's supply chain
Apple has expanded iPhone production in India through partners including Foxconn and Tata Electronics as it works to reduce its reliance on China. Apple still depends on suppliers across multiple countries, making lower import costs more valuable as more final assembly shifts to India.
The duty changes are unlikely to directly lower iPhone prices because Apple's retail prices also reflect logistics, taxes, currency fluctuations and regional pricing decisions. Suppliers operating in India are more likely to benefit through lower manufacturing costs.
India wants to grow its electronics manufacturing industry to $500 billion by fiscal year 2030.
Smartphone production has already increased 28-fold over the past decade to 5.45 trillion rupees, or about $57 billion, during the 2024-25 fiscal year. The duty exemptions support that strategy by encouraging more manufacturing and component production inside India.
