Over the last few years, India has emerged as one of Apple’s most important markets, not just for selling iPhones but for making them too. With the launch of the iPhone 16 series, Apple is now assembling its latest devices right here on Indian soil. In fact, many of these iPhones are even being exported to the U.S. and other global markets from India.
So naturally, the big question for Indian consumers is, if iPhones are being made in India, why are they still so much more expensive than in countries like the U.S., Dubai, or Hong Kong?
It’s a fair question, and the answer lies in a combination of factors—ranging from taxes and duties to Apple’s own pricing strategy and the nature of global manufacturing.
Let’s break it down.
Let’s take Apple’s iPhone 16 as an example. If you look at the pricing across different regions, India still sits on the higher end of the spectrum.
Here’s how the iPhone 16 series is priced in India:
iPhone 16: ₹79,900
iPhone 16 Plus: ₹89,900
iPhone 16 Pro: ₹1,19,900
iPhone 16 Pro Max: ₹1,44,900
Now compare this to the prices in some other countries (converted to INR):
U.S.: ₹67,000 to ₹1,00,657
Dubai: ₹77,698 to ₹1,16,559
Japan: ₹74,277 to ₹1,12,964
Hong Kong: ₹74,274 to ₹1,09,802
That’s a price difference of ₹25,000–₹45,000 for the same phone—often built in the same Indian factories. So why do we, the domestic buyers, end up paying more?
Yes, Apple now assembles a significant number of iPhones in India, including the latest iPhone 16 lineup. Foxconn and Tata Electronics are at the forefront of this shift, with massive plants in Tamil Nadu and Karnataka handling assembly operations.
But let’s be clear about one thing: assembling a product and manufacturing it entirely are not the same.
Most of the iPhone’s core components, such as the display, chipset, camera systems, and memory, are still imported from countries like Japan, South Korea, Taiwan, and the U.S. These parts are brought into India, where the final assembly takes place.
And that’s where things start to get expensive.
Even though iPhones are assembled locally, the imported components are subject to import duties, which can be as high as 22% depending on the part. Then, once the phone is ready to hit the shelves, it gets another 18% slapped on it in the form of Goods and Services Tax (GST).
So when you add up all these costs, duties on components, logistics, warehousing, distribution, GST, and retailer margins, the final retail price can be 30–40% higher than the base production cost.
Even though the Indian government has introduced Production Linked Incentives (PLI) to encourage local manufacturing, these don’t always translate into visible savings for the average buyer, at least not yet.
Then there’s the brand itself. Apple doesn’t just sell phones; it sells an experience. In India, that experience comes with a hefty price tag.
Apple positions itself as a luxury brand, and part of that strategy is to maintain higher price points to preserve exclusivity. While Android brands slash prices and offer deals to win over the market, Apple takes the opposite route, offering EMI plans, trade-in discounts, and bundling older models at reduced rates to increase accessibility, without ever slashing its flagship prices.
The profit margins on iPhone Pro models are significantly higher, and Apple uses that to strategically keep older-generation models more affordable, especially in markets like India.
According to a recent report by the Global Trade Research Initiative (GTRI), even if the U.S. were to impose a 25% tariff on iPhones assembled in India, it would still be cheaper for Apple to manufacture them here than to shift production back to the U.S.
Because labour costs in India are significantly lower. Assembly workers in India earn around $230 per month, while in California, for instance, wages would be closer to $2,900 per month. This makes the cost of assembling an iPhone in India about $30, compared to $390 in the U.S.
The report also revealed the economics of a $1,000 iPhone:
Apple retains around $450 per unit for brand value, software, and design.
U.S. companies like Qualcomm and Broadcom contribute about $80.
Taiwan, South Korea, and Japan supply key components like chips, memory, and camera systems, accounting for $150–$90–$85, respectively.
Assembly work in China or India? Just $30 per unit—less than 3% of the total value.
So, despite talk of tariffs and trade wars, India remains a cost-effective hub for Apple’s global production strategy. But again, that efficiency isn’t currently benefiting Indian consumers in the way many expected.
Here’s where things get interesting. Apple is actively working to localise more of its production value chain in India.
The iPhone 16, including the Pro models, is now being assembled locally. Apple even exports Indian-made iPhones to the U.S. and European markets.
In partnership with Foxconn, Apple is investing $1.5 billion in a massive display module manufacturing plant in Tamil Nadu. This will allow India to produce one of the iPhone’s most expensive components domestically.
A new facility in UP is set to handle the packaging and testing of display-driver chips, thanks to a $433 million investment. This is a step toward deeper tech manufacturing and not just final assembly.
Apple is aiming to export 60 million iPhones from India by 2026, significantly expanding India's role in its global supply chain.
All of this points to a future where the majority of an iPhone’s value is created in India, not just its final touches. And when that happens, retail prices could start to come down meaningfully.
Here’s the honest answer: not immediately, but eventually, yes.
India is on the right path. With more local sourcing, reduced import reliance, and government incentives supporting large-scale production, the total cost of building an iPhone in India will drop. But unless the government rethinks GST and component duties, and Apple passes the savings on to consumers, significant price drops may still take a few years.
And remember, Apple is in no rush to become a mass-market brand. Its image depends on staying premium, exclusive, and aspirational.
It’s ironic, really. The same iPhone made in Tamil Nadu might end up being sold in San Francisco at a lower price than in New Delhi.
Until India becomes a fully self-reliant ecosystem for electronics manufacturing, from semiconductors to displays to sensors, some of these cost challenges will persist. But the good news is we're getting closer.
The iPhones we buy today are already more “Indian” than they’ve ever been. In a couple of years, they might finally come with Indian price tags too.
