Apple's Indian Vendors Reverse Trade Flow, Shipping Record $2.5 Billion to China: Report

Apple's Components Exports to China Hit Record $2.5 Billion in FY26

Apple's vendors have exported a record $2.5 billion worth of components and sub-assemblies to China in the first fiscal year of FY26, signaling early gains from the government's electronics component manufacturing scheme (ECMS) notified last year. This development marks a significant reversal of the traditional trend, where Chinese suppliers exported parts to India for electronics manufacturing.

India's Electronics Exports to China See Sharp Jump

India's electronics exports to China are likely to reach $3.5 billion in FY26, with $2.8 billion already achieved till January. This represents a sharp jump from around $920 million in FY25, while exports in earlier years were negligible. As data from other sectors comes in, India's overall exports to China are expected to cross $18 billion in FY26, up from $14.25 billion in the previous fiscal.

| FY | India's Electronics Exports to China | Expected Exports to China | | --- | --- | --- | | FY25 | $920 million | - | | FY26 (Estimated) | $3.5 billion | - | | FY26 (Actual till January) | $2.8 billion | - | | FY26 (Expected) | - | $18 billion |

Industry experts have noted that the surge in electronics exports to China is an unexpected upside of the smartphone production-linked incentive (PLI) scheme and ECMS, which encouraged Apple to build a strong local ecosystem capable of competing on quality. Industry experts believe that this upside from the PLI scheme was unthinkable when Apple first began shifting production of iPhones from China to India in 2021.

Over the five-year smartphone PLI scheme, Apple produced iPhones worth $70 billion in India, of which $51 billion - nearly 73% - was exported, largely to the US. This has made iPhones India's largest exported product in the previous fiscal. Key Apple vendors driving exports to China include Foxconn, Tata Electronics, Pegatron (owned by Tata), Motherson Group, Salcomp, Tata Reality and Infrastructure Limited, and Yuzhan Technology.

The components exported include printed circuit board assemblies (PCBAs), mechanical parts, housings, flex PCBAs, and conductive graphite buttons. These exports are classified under three HSN (harmonised system of nomenclature for Customs) codes and have gathered pace after April 2025.

Government Aims to Boost Domestic Value Addition and Component Manufacturing

The government is now focusing on increasing domestic value addition and boosting component manufacturing and exports under ECMS. Along with a potential PLI 2.0, Indian companies could account for 30-35% of global mobile phone production and emerge as a key force in global electronics supply chains. China, a major source of India's electronics imports, could increasingly become an export destination for Indian component makers.