Apple to move half of its supply chain from China to India, employ 5 lakh people in 3 years

Apple plans to relocate at least half of its existing supply chain from China to India over the next three years as it continues to distance itself from China and invest in India. In the process, Apple will also significantly increase the number of jobs it offers in India.

According to a report by the Economic Times, Apple aims to employ at least 500,000 people directly in India’s ecosystem of component makers and suppliers, a substantial increase from the current level.

Apple is responsible for about 1,50,000 blue-collar jobs in India, the highest by a single company.

The move away from China is part of Apple’s ongoing strategy to reduce its reliance on China and increase local value addition from its Indian suppliers. The strategy is famously called the China Plus One policy.

Among all countries, it is in China that Apple has the highest domestic value addition in the world, at 28 percent. The value-added in India is about 11–12 percent, expected to go up to 15–18 percent.

Experts predict that India’s growing importance as a market for both exports and local sales of Apple products will catalyze a vibrant supplier ecosystem and potentially position the country as a hub for Apple’s research and development, especially in software-to-silicon design.

Neil Shah, vice president at Counterpoint Research, noted that India’s current local value addition to iPhone manufacturing stands at 14%, compared to 41% in China. However, as per the ET report, Apple could increase this figure to over 20 percent with the right investments and expansion.

Apple’s suppliers in India include Tata Electronics, Salcomp Technologies, Foxlink, and Sunwoda. These companies have emerged as top job creators, with estimates suggesting that at least 1,50,000 direct jobs and an additional 3,00,000 indirect jobs were created since the production-linked incentive (PLI) was introduced in August 2021.

Contract manufacturers such as Foxconn, Wistron, and Pegatron, which produce iPhones in India, have also significantly contributed to job creation in the country.

Last year, these manufacturers collectively created over 77,000 direct jobs and have plans to hire more than 10,000 additional employees during peak production periods.

Apple’s increased focus on manufacturing in India is evident in its production numbers, with iPhones worth over ₹1 lakh crore produced in India in the previous year, a substantial increase from previous years. Tim Cook, CEO of Apple, highlighted the company’s strong performance in emerging markets, including India, during the recent earnings call, emphasizing robust double-digit growth and record-breaking sales figures in several countries.