iPhone Production May Be Impacted by Potential 25% Decline in India's Smartphone Exports Amid Tensions with Iran

India's Smartphone Exports at Risk Due to Iran Conflict

India has been positioning itself as a leading destination for smartphone manufacturing, with the government offering incentives like the Production Linked Incentive (PLI) Scheme. However, a new report by Nikkei Asia suggests that the ongoing Iran conflict could derail India's booming smartphone exports.

The report notes that India has emerged as one of the top alternatives to diversify its manufacturing footprint, with global brands increasing local assembly and overseas shipments. According to official data, India exported approximately $11 billion worth of mobile phones in the first half of the fiscal year beginning April 2025, marking a 55% increase from the previous year.

However, shipments that rely heavily on Middle East trade hubs are facing significant declines in the coming weeks, with exports of smartphones from India potentially decreasing by 22% to 25% in the coming weeks. The impact of the conflict is said to be more on logistics, while demand remains relatively resilient.

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To mitigate the disruptions, companies are temporarily shifting away from hubs like Dubai and Doha and using more direct routes. Apple, which is among the large brands less exposed to the disruptions from rerouting shipments, has seen a significant increase in its iPhone production in India.

Apple now makes around 25% of the iPhones sold in the world in India, marking a 53% increase in its production from the preceding year. The company assembled around 55 million iPhones in India in 2025, up from the 36 million iPhones assembled a year earlier, whereas Apple produced around 220 million to 230 million iPhones in the last year.

Despite this growth, China still makes the biggest chunk of iPhones sold globally. However, the trade war between the US and China led Apple and its suppliers to move a great share of devices meant for the American market to alternative manufacturing hubs, where India emerged as the major spot.

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The report also notes that electronics assembly still costs more in India compared to manufacturing hubs like China and Vietnam.