Chains of Resilience: The Strategic Decoupling of iPhone Production in a Fractured Indo-Pacific
Author: Xiangwei Xia
Photo Credit: Yiwei Zhao
The pathway to global development and stability is increasingly fractured. Geopolitical rivalries and technological decoupling are systematically splintering the international economic order, overwhelming traditional frameworks of globalization. Nowhere is this fragmentation more physically evident than in the shifting tectonic plates of global electronics manufacturing. On September 10, 2024, Apple launched the 16th generation of its flagship iPhone. In Zhengzhou, a city located in central China, large numbers of workers had labored tirelessly over the preceding months to assemble this new product. Since the early 2010s, this factory has been the main driving force behind Apple’s products. Until 2019, Chinese factories produced 99% of Apple’s products, with Foxconn’s Zhengzhou plant accounting for nearly half of that output.
As US-China tensions splinter the world's most efficient manufacturing ecosystem, emerging economies like India are leveraging this breakdown to build sovereign industrial resilience — though the path is neither simple nor guaranteed.
2025 marked a notable shift in Apple's supply chain. Apple Inc. increased iPhone production in India by about 53% last year, now manufacturing a quarter of its marquee devices thereAssembly workshops and large dormitory complexes are being constructed in Sriperumbudur, in the south of Tamil Nadu tate, with motorcycles, autorickshaws, and buses transporting employees between factories and housing. India is pushing to take on a production role that China has handled exclusively. This transition represents far more than a corporate search for cheaper labor; it is a profound manifestation of how systemic geopolitical breakdown is forcing a radical reimagining of supply chain resilience.[1]
Before analyzing the emergence of new production hubs, it is vital to understand the intricate synergy that is currently being fractured. Producing an iPhone begins with its design, led by Apple’s industrial designers at its Cupertino headquarters in California. As a result, every iPhone manual starts with “Designed in California.” Next comes production, with components sourced from over 40 countries worldwide, forming screens, lenses, CPUs, speakers, and more. Typically, around 30% of these components are manufactured in the US, 30% in South Korea, 10% in Japan, and 10% in Taiwan. Neither China nor India is the primary sources for component manufacturing. However, once gathered, these components are shipped for assembly—a role that China held almost exclusively held prior to COVID-19.
For decades, this seamless, borderless network operated on a singular, elegant logic: ultimate efficiency and optimal resource allocation. The current trend of forced "de-risking" is, in many ways, a deliberate fracturing of this global synergy. By prioritizing geopolitical alignment over economic rationale, the international community is actively breaking down the most efficient production model in human history. This fracture inevitably leads to deep inefficiencies, and ultimately, the financial burden of this geopolitical friction will be borne by global consumers, who are forced to pay higher costs for a less integrated, more fragmented world.
Yet, this fragmentation appears to be an unstoppable tide, driven not by market forces but by the overriding imperative of national survival. As articulated in the architecture of U.S. strategy, most notably echoing the sentiment of the National Security Strategy, "Economic security is national security." The weaponization of supply chains to reduce dependencies on strategic competitors is now institutionalized.[2] In 2022, the Biden Administration launched the Indo-Pacific Economic Framework and a series of offshoring policies aimed at enhancing the resilience of supply chains within the United States and among its allies. The era of "friend-shoring" has officially commenced, replacing the pursuit of efficiency with the pursuit of security[3].
This is precisely the time for India to signal its growing manufacturing presence. This shift is perhaps this is a partial result of India’s manufacturing 3.0 strategy to attract high-end manufacturing and boost local industry. In 2023, Piyush Goyal, India’s Minister of Commerce and Industry, announced the goal of producing 25% of iPhones in India. This aligns with the broader trend of manufacturing moving from China to South Asia in order to mitigate the impact of the turbulent US-China trade war and to take advantage of a more affordable workforce.[4]
This trend mirrors history. In the 1990s, low-end manufacturing shifted from developed regions in the US and Europe to China. In 1998, Foxconn opened its first
Chinese factory in Shenzhen, and its facilities soon spread across the country, with the Zhengzhou Foxconn plant opening in 2010. This plant has since grown to become one of the primary assembly hubs for iPhones. Over more than a decade, the iPhone has transformed the Zhengzhou Foxconn into a small “iPhone city,” complete with bars, supermarkets, karaoke bars, and restaurants to cater to workers’ needs. Chinese media estimate that this single factory supports over 700,000 people.
The narrative of "de-risking" frequently misunderstands the true nature of supply chain resilience. The 700,000-strong ecosystem in Zhengzhou is not merely a congregation of cheap labor; it is a deeply integrated, highly responsive industrial cluster that took a quarter of a century to build. It represents a form of systemic resilience characterized by rapid prototyping capabilities, immediate access to specialized tooling, and an unmatched logistical nervous system. While geopolitical mandates attempt to force decoupling, the sheer gravitational pull of such a comprehensive ecosystem means that dismantling it carries catastrophic economic friction.
Despite the monumental depth of China's industrial base, the fractures in the U.S.China relationship are creating unprecedented vacuums, and emerging economies are actively stepping into the breach. Similar developments are unfolding in India today. In 2023, estimates showed that India assembled about 13% of the total global output of iPhones – up from almost zero – and this figure doubles by 2026[5]. [6]The iPhones produced in India not only serve the domestic market but are also exported abroad, primarily to the United States. Many Western companies consider India as a manufacturing destination because there are over one billion potential workers with fewer than 400 million jobs at present. In the role of component assembly, India is steadily chipping away at China’s dominance.
India’s journey began in 2017, when Apple first assembled the iPhone SE and older models in a local factory. By 2022, India began assembling Apple’s flagship iPhones. This development echoes the Modi government’s Production Linked Incentive scheme. Apple and its suppliers have generated around 165,000 direct jobs in the country. At the same time, local giants such as the Tata Group are gradually taking over factories previously controlled by foreign companies.
Tata Group's takeover of these facilities reflects a broader pattern of domestic industrial consolidation. It demonstrates how, within a fractured system, communities and nations forge new pathways.
India is not content with merely being a passive recipient of offshored assembly work. By indigenizing foreign-controlled facilities, emerging economies in the Global South are leveraging the breakdown of traditional top-down global governance to build their own sovereign industrial resilience.
However, the path to building alternative resilience in a fractured world is fraught with friction. To further advance its role in global manufacturing, India continues to face several challenges, including unfavorable business metrics, infrastructure and supply chain issues, and a late entry into the tech manufacturing landscape. While India has an abundance of young workers, it still lacks skilled and semi-skilled workers and offers limited vocational training opportunities. At the same time, foreign corporations have traditionally cited bureaucratic hurdles, ease of doing business, financial instability, and working conditions as concerns. In 2023, Foxconn split from its Indian counterpart Vedanta due to the latter’s financial troubles and subsequently partnered with another firm. By comparison, China still has the most comprehensive supply chain, manufacturing ecosystem, and the highest level of industrialization on a comparable scale.
This comparison underscores a critical reality: resilience cannot simply be legislated into existence through policy frameworks like the IPEF. If receiving nations lack the foundational infrastructure and technical sovereignty to absorb massive supply chain migrations, the new "friend-shored" networks may paradoxically prove more fragile and susceptible to shocks than the integrated systems they sought to replace.[7]
Nonetheless, India has time. Its youthful demographic structure and its unique geopolitical position within the US-China conflict offers substantial opportunities. Looking forward, India stands as a powerful market with steadily improving manufacturing capabilities and is increasingly positioned as a viable alternative in the global manufacturing landscape.
As we look toward a future defined by systemic breakdown, the story of the iPhone's supply chain migration reveals both the peril and possibility of our times. Global resilience will no longer be defined by the uninterrupted flow of goods from a single monolithic hub.[8] Instead, it will be characterized by a complex, decentralized, and often uneasy equilibrium. In this fractured future, true resilience lies in the ability of emerging markets to adapt to geopolitical shocks and the capacity of established giants to evolve beyond mere assembly, collectively forging new pathways for global development where old systems have broken down.
References
[1] Naughton, Barry J. The Chinese economy: Adaptation and growth. mit Press, 2018.
[2] Farrell, Henry, and Abraham L. Newman. "Weaponized interdependence: How global economic networks shape state coercion." International security 44, no. 1 (2019): 42-79.
[3] Deng, Ziliang, Youhan Wang, and Haojun Xu. "Supplier response to Apple’s friendshoring." Journal of Business Research 200 (2025): 115614.
[4] Giroud, Axèle. "World Investment Report 2023: Investing in sustainable energy for all: United Nations Conference on Trade and Development, Geneva and New York, 2023, 205 pp." (2024): 128-131.
[5] Sankalp Phartiyal, Apple Now Makes About 25% of Iphones in India After China Pivot, Bloomberg https://www.bloomberg.com/news/articles/2026-03-10/apple-now-makes-about-25-of-iphones-in-india-after-china-pivot?embedded-checkout=true
[6] Shanmugam, Karthick, and R. Arivazhagan. "Progress Under Pressure: India’s Mobile Phone Industry Navigating Barriers and Geopolitical Tensions." Advances in Consumer Research 2 (2025): 325-332.
[7] Sheffi, Yossi. The resilient enterprise: overcoming vulnerability for competitive advantage. MIT press, 2007.
[8] Gereffi, Gary. "Global value chains and development." Cambridge Books (2019).