The iPhone 17 series has once again sparked a nationwide buying frenzy in India.
According to Indian media reports, on September 19, as Apple’s latest lineup reached stores, fans crowded retail outlets across the country. Lines stretched for hundreds of meters outside Apple’s flagship store in Mumbai’s Bandra Kurla Complex, where a brief scuffle broke out before security restored order.
The excitement surrounding the iPhone 17 launch was no coincidence. Beyond notable hardware upgrades, India has become one of Apple’s most strategically important markets. Two years ago, CEO Tim Cook called India an “incredibly exciting market” and added that its “vibrancy is unbelievable.”
India’s contribution to Apple’s total revenue remains modest. Rough estimates put it at only around 2%, but analysts see vast long-term potential. This raises two key questions: why does a price-sensitive market like India have such a strong appetite for Apple, and can it sustain the company’s next phase of growth?
India: Apple’s “next China?”
Cook’s long-term push into India is beginning to show results. International media reports indicate that Apple’s annual sales in India hit a record USD 9 billion in fiscal 2025 (ending March 31, 2025), up 13% from USD 8 billion the previous year. iPhones accounted for most of that revenue, while MacBook demand also climbed.
Under optimistic projections, India could contribute about 3% of Apple’s FY2025 revenue. Though still small compared with Greater China’s 16% share (as of Apple’s Q3 FY2025 report), India is emerging as a key growth driver that supports the company’s overall performance.
Strong economic expansion and rising disposable incomes are powering Apple’s ascent. Data from Wind show that between 2013–2023, India’s per-capita national disposable income rose from INR 68,572 (USD 773) to INR 108,786 (USD 1,226.3), a compound annual growth rate of about 4.7%.
India’s per-capita disposable income now mirrors China’s level in 2007, while its GDP growth resembles China’s pace between 2013 and 2015. Apple’s rise in China between 2008–2016 coincided with its deep supply chain integration there. Its strategy in India is clearly modeled on that earlier playbook.
Demographics also play a role. India’s youthful population and growing optimism have spurred spending on high-end electronics. Although the market is still dominated by low-end and midrange smartphones, the ultra premium segment grew 37% year-on-year (YoY) in Q2 2025, representing the fastest rate across all price tiers.
Between Q3 2023 and Q4 2024, Apple’s shipment share in India jumped from 6% to 11%, breaking into the country’s top five smartphone brands for the first time. In Q2 2025, the iPhone 16 was India’s bestselling smartphone, driving Apple’s highest ever second-quarter shipments there.
“Apple used to have very limited visibility in India—few people could afford it—but over the past decade, the company has invested heavily in both manufacturing and marketing here, and the results are showing,” an industry insider told 36Kr.
While the iPhone 16 and 17 lines have sold out nationwide, Samsung’s S25 Ultra also performed well this year. However, Samsung’s overall shipments fell YoY due to weaker midrange sales, highlighting India’s shift toward premium devices.
As flagship phones increasingly serve as status symbols, Apple’s focus on high-end models reinforces its brand. Even its entry-level iPhone 16e starts at INR 60,000 (USD 676.3), placing it squarely in the premium segment.
“If Apple’s brand equity stays intact, it will likely evolve in India much as it did in China a decade ago, becoming a symbol of social status. Consumers will save up to buy an iPhone as a marker of class,” the same industry insider said.
Apple is also expanding its retail footprint. After opening its first two stores in New Delhi and Mumbai in 2023, it launched a third in Bengaluru this September, with more planned in Pune and Noida. To attract local buyers, Apple has introduced India-specific programs such as student discounts, trade-in options, and bank cashback offers, all aimed at lowering upfront costs.
Can India support Apple’s supply chain?
While retail growth is accelerating, Apple is also scaling up local production to reduce costs and diversify its supply chain. India now not only assembles iPhones but also contributes to design, R&D, and testing. Key sites include Tata Group’s facility in Hosur, Tamil Nadu, and Foxconn’s new plant near Bengaluru’s international airport.
Tata Group is expected to handle half of India’s iPhone output within two years. Insiders say all four iPhone 17 models are being produced in India and shipped directly to the US. This is the first time in Apple’s history that an entire new iPhone series has been manufactured there.
India’s iPhone production reached USD 22 billion in FY2025, up nearly 60% YoY, according to Bloomberg. Between April and July, iPhone exports totaled USD 7.5 billion, underscoring India’s growing role in Apple’s global operations.
China’s experience offers perspective. In 2009, nearly all iPhone components were sourced abroad, with final assembly done in China. Over the next decade, as the local supply chain matured, China’s share of Apple’s production surpassed 70%.
India has now assumed part of that assembly work. Since 2018, Apple has gradually relocated segments of its supply chain from China to India and Southeast Asia. Of the 17 firms assembling Apple products, only two remain Chinese. Although final assembly adds limited value, India’s ramp-up resembles China’s industrial rise around 2008.
India’s advantages include policy support and lower labor costs. The government provides subsidies to consumer-electronics manufacturers tied to Apple’s supply chain, and assembly-line wages are about one-seventh of those in China.
However, challenges remain. “The yield rate in Indian factories is 93%, about four percentage points below Zhengzhou’s 97%,” said Lu Kelin, a certified international innovation management expert. “Indian workers’ overall skill level still falls short, and they continue to rely heavily on Chinese engineers.”
Apple and its partners have launched training programs to help Indian workers master production workflows and improve yields. However, supply chain localization remains difficult. Components such as chips, OLED panels, and camera modules still depend on suppliers in China, South Korea, and Japan, leading to longer lead times and higher logistics costs.
Infrastructure remains a challenge. Citing internal sources at Foxconn, The Wall Street Journal reported in 2019 that India’s roads, ports, and other facilities still lag behind China’s, and that local workers are not yet equipped to produce high-end OLED modules.
Tariff uncertainty adds further complexity. During Apple’s Q3 2025 earnings call, Cook noted that most Apple products fall under Section 232 of the “US Trade Expansion Act of 1962.” While the Trump administration has temporarily waived some tariffs, it remains unclear whether these exemptions will continue.
How will India affect Apple’s valuation?
Despite India’s growing production base, it still depends on East and Southeast Asia for critical components. Apple’s industrial footprint in India today mirrors China’s development stage around 2008.
As India’s consumer market expands, Apple’s supply chain could increasingly cluster there, creating scale and synergy benefits. Still, infrastructure and logistics gaps mean India is years away from matching China’s efficiency.
“In the near term, as long as government incentives stay in place, Apple could turn India into a fully integrated ‘second hub’ for device production, components, and exports,” Lu said.
Because India is Apple’s fastest-growing single market, local production serves not only diversification goals but also booming domestic demand. This alignment enables Apple to capture gains from India’s ongoing consumption upgrade and sustain long-term growth.
On the demand side, India today mirrors China around 2012—a market where appetite for premium electronics is rapidly growing. Apple’s ecosystem is becoming deeply embedded in this space. The iPhone has become a cultural marker for young Indian consumers, much as it was for Chinese youth a decade ago.
India’s buoyant capital markets and steady economic momentum are also shaping investor confidence. As Apple’s revenue and asset exposure in India rise, this optimism may be reflected in its valuation. India’s growth strengthens both Apple’s fundamentals and market sentiment, potentially serving as a stabilizing factor for its share price.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Chen Sizhu for 36Kr.