Foxconn, a principal supplier for Apple, announced on May 20, 2025, a $1.5 billion investment in its Indian subsidiary, Yuzhan Technology India, located in Tamil Nadu. This strategic move underscores Apple's ongoing efforts to diversify its manufacturing operations beyond China amid escalating trade tensions and tariffs.

The investment involves Foxconn's Singapore-based subsidiary acquiring 12.77 billion shares at 10 rupees each, totaling 127.74 billion rupees ($1.5 billion). Yuzhan Technology India is instrumental in producing electronic components and assembling Apple's iPhones.

Apple has been actively shifting its manufacturing operations to India to mitigate risks associated with U.S.-China trade tensions. Earlier this year, the company exported approximately 600 tons of iPhones valued at $2 billion to the U.S. This move aligns with Apple's broader strategy to reduce dependence on Chinese manufacturing.

The Indian government's Production-Linked Incentive (PLI) scheme has played a pivotal role in attracting such investments. Launched in 2020, the PLI scheme offers incentives ranging from 4% to 6% on net incremental sales of eligible products over the sales in the base year. This initiative has led to a significant increase in mobile phone production in India.

Foxconn's investment is expected to bolster India's position as a global manufacturing hub, potentially leading to job creation and economic growth in the region. The Apple ecosystem has already generated approximately 185,000 direct jobs in India, with over 70% of these positions held by women, many of whom are first-time workers.

However, the rapid expansion of manufacturing operations has raised concerns about labor conditions. In December 2021, a government inspection of Foxconn's Sriperumbudur factory revealed multiple safety violations and labor law breaches, prompting improvements. Despite increased salaries and better conditions post-protests, workers still face high production targets, low wages, and job insecurity, especially among contract workers employed through third-party agencies.

Former U.S. President Donald Trump has publicly criticized Apple's decision to manufacture a significant portion of its U.S.-bound iPhones in India. During a visit to Qatar, Trump expressed dissatisfaction, claiming that Apple had long benefited from U.S. tolerance of its operations in China and should instead focus on domestic manufacturing. He also suggested that Apple would ramp up U.S. production following their conversation, though Apple has not confirmed this.

Apple's strategic shift has had notable effects on the smartphone market. In March 2025, U.S. smartphone shipments surged by 30% as major manufacturers, including Apple, accelerated imports in anticipation of new tariffs announced by President Trump. Apple led this surge by airlifting a record $2 billion worth of iPhones from India, utilizing suppliers like Foxconn and Tata Electronics. This move is part of a broader strategy to reduce reliance on China, with growing production capacities in India and Vietnam serving to mitigate geopolitical risks.

Apple plans to significantly increase iPhone assembly in India, aiming to cut U.S. imports from China by 2026. In response to ongoing U.S.–China trade tensions and high tariffs, Apple is doubling production in India to 80 million units by next year to diversify its supply chain. The U.S. and India are reportedly close to a trade agreement, which could further facilitate this shift.

Foxconn's $1.5 billion investment in India marks a significant milestone in Apple's strategic shift to diversify its manufacturing operations. While this move presents economic opportunities for India, it also brings challenges related to labor conditions and geopolitical tensions. As Apple continues to navigate these complexities, the global tech industry will closely watch the outcomes of this significant transition.