Patrick McGee, author of 'Apple in China', shares 153 million reasons why Tim Cook’s tech giant can't go full throttle in India

Apple’s journey in India has been steady but far from spectacular. Despite India’s vast potential and rising middle class, Apple has yet to match the explosive growth it saw in China during a similar timeframe. This gap reflects not just corporate caution but also the different business environments India and China offer.

China’s early advantage and Apple’s deep roots

Patrick McGee, former Financial Times Apple reporter and author of Apple in China, lays out how Apple’s success in China grew from long-term, deep investments. His book explains how Apple tied its fortunes closely with Beijing, benefiting from a manufacturing ecosystem decades in the making.

A key moment was the 2022 Shanghai lockdown, which exposed the fragility of China as a supply base. McGee quotes a former Apple executive: “China went from being a reliable supplier to a completely unreliable supplier.” This disruption pushed Apple to accelerate its India plans, but not without hesitation.

India: A market full of promise but bound by constraints

Tim Cook once said in 2018 that India was on a “China-like trajectory.” Yet, five years later, the pace remains cautious. Unlike China a decade ago, India demands 30 per cent local sourcing of components, making it tougher for Apple to build the kind of supply chain it enjoyed in China.

“When the rules were relaxed in 2017, Apple suppliers began assembling some iPhones in India – with Taiwanese partner Wistron – a move that allowed Apple to avoid hefty tariffs,” McGee writes. This helped Apple sell more affordable iPhones to India’s growing middle class.

However, the first online Apple Store in India only opened in 2020, and the first physical store came in 2023—fifteen years after China’s first store. India started by assembling entry-level models like the iPhone SE, then moved on to flagship devices. By 2024, India was producing Pro models, matching distribution timelines with China.

India’s potential, but Apple’s cautious steps

Speaking to CNBC-TV18, McGee explained India’s market allure: “Apple has been making iPhones in India since 2017, but that was just about tariffs. PM Narendra Modi had put tariffs on smartphones coming from China, about 20%. When Apple looked at India and saw the next big growth market, 8% GDP growth, an emerging middle class, and 1.5 billion people, it began investing in India to avoid tariffs."

However, he emphasised the scale still falls short: “You might say - Oh, there’s a new factory that needs 30,000 people. Dormitories being built by Foxconn, that’s not enough. In China, for instance, a company called Biel Crystal, which plays a role in the iPhone’s glass, had 72,000 people just working on Apple products. That’s more than 14 factories in India combined.”

India offers promise but lacks the scale and ecosystem Apple needs for a full shift.

Growth but not at China’s scale

Still, the numbers show India’s growth is modest by comparison. McGee notes, “From 2016 to 2023, iPhone production in India grew from zero to around 15 million units, accounting for 7 percent of global shipments. China, between 2006 and 2013, ramped production from zero to 153 million units.” That means India’s pace is roughly one-tenth of China’s at the same stage.

Apple’s operations in India focus mainly on FATP — final assembly, test, and pack out — which is labour-intensive. Components are flown in from China and assembled locally by Wistron and Foxconn. McGee shares a witty remark from a manufacturing engineer: made-in-India iPhones are “assembled in China, disassembled there, and then sent to China for reassembly.”

Apple aims for India to become fully self-sufficient, but this will take years. A senior Apple engineer told McGee the development pace has been slow, and having assembly in both countries using the same supply chain adds complexity, not resilience.

Lower labour costs in India are partly offset by logistics challenges of moving parts from China. The trade-off is clear: India offers potential cost savings, but the supply chain remains tangled.

Lessons from China and Trump’s US push

McGee also recalls a telling episode from the US. During Donald Trump’s first term, the president showcased an Apple factory in Texas as a victory for American manufacturing. Yet, it was an “unmitigated fiasco.” Workers from China had to be flown in to fix production issues. This contrasts starkly with the long-term ecosystem China built around Apple.

McGee writes that Apple’s transfer of technology to China over decades helped fuel China’s tech ambitions, including the Made in China 2025 plan. He says, “Here was America’s most famous tech giant volunteering to play the role of Prometheus, handing the Chinese the gift of fire.”

While Apple’s move to India and Vietnam may help reduce reliance on China, the company cannot yet abandon the Chinese supply chain without risking disruption. Apple’s China story is a lesson in the importance of an integrated manufacturing ecosystem — one that India is still years away from building.
Apple’s experience shows the challenge of building a complex supply chain in a new country. China’s low wages, limited labour rights, and political environment allowed a manufacturing ecosystem to flourish rapidly. India’s democratic governance and economic policies offer different hurdles and advantages.

Apple is inching towards India and Vietnam but remains deeply tied to China for now. The company’s cautious approach reflects the complex balance between opportunity and risk in global manufacturing.