Why iPhones Are Still Expensive in India, Despite Being ‘Made in India’
When Apple announced its plans to locally assemble the iPhone in India back in 2016, many Indian consumers hoped this would lead to one thing, lower iPhone prices. Fast forward to 2025, Apple is not only assembling but increasingly expanding its manufacturing footprint in India, with newer models being produced here. And yet, the price of an iPhone in India remains noticeably higher than in the U.S., Dubai, Singapore, and even Hong Kong.
Despite the "Made in India" label becoming increasingly accurate, the factors driving iPhone prices in India are far more complex than just where they’re assembled.
Let’s take the iPhone 16 lineup as an example.
In India, the iPhone 16 starts at ₹79,900, while the top-end iPhone 16 Pro Max comes in at ₹1,44,900. Compare this with the U.S., where the base iPhone 16 costs $799 (approx. ₹67,000) and the Pro Max is priced at $1,199 (roughly ₹1,00,657). In Dubai, the Pro Max retails at around ₹1,16,559. That’s a price difference of nearly ₹30,000–₹45,000 depending on the model and market.
Given that India is now not just assembling iPhones for its own market but also exporting them globally, many are wondering: Why is India still one of the most expensive places to buy an iPhone?
The first thing to clarify is the distinction between “assembled” and “manufactured.”
While Apple has ramped up assembly operations in India—especially through its partners like Foxconn and Tata Electronics—the majority of the high-value components are still imported. Displays, chipsets, memory modules, cameras, and other precision parts are shipped in from Taiwan, Japan, South Korea, and the U.S.
This means that even though the final device might be assembled in Tamil Nadu or Karnataka, the imported parts are subject to customs duties and taxes, which inflate the total cost.
India levies import duties on components that can range from 10% to 22%, depending on the item. Add to this the 18% Goods and Services Tax (GST) on smartphones, and the price climbs significantly.
Even when Apple assembles a phone locally, if a large portion of its components are imported, the cumulative tax impact remains high. According to several industry estimates, up to 40% of the total price of an iPhone in India can be attributed to taxes and duties.
Another reason why iPhones are expensive in India is simple: Apple wants them to be.
In a market where Apple controls just 6% of smartphone shipments but nearly 60% of premium segment sales, Apple positions itself as a luxury brand. That means no pricing wars. No discount-driven tactics. Apple maintains a high price to preserve its premium identity, while pushing affordability through older models, trade-in offers, and EMI plans.
It’s also worth noting that while iPhone prices have remained stable or risen slightly in India, Apple’s Pro models bring in higher margins, allowing the company to price base models or older versions more aggressively.
The price gap becomes even more ironic when you consider this: iPhones assembled in India are still cheaper in the U.S., even if President Trump’s threatened 25% tariff were applied.
According to a Global Trade Research Initiative (GTRI) report (May 2025), manufacturing iPhones in India remains significantly more cost-effective than doing so in the U.S., even with trade penalties.
Labor Costs: Assembly workers in India earn about $230/month, compared to $2,900/month in the U.S. That’s a 13x difference.
Assembly Cost: Assembling an iPhone in India costs just $30, while in the U.S., it would shoot up to $390.
Apple’s Profit Margins: Currently, Apple earns around $450 per iPhone. If manufacturing were to shift to the U.S., margins would plummet to $60, unless retail prices are hiked dramatically.
The GTRI report also highlighted that India and China, despite handling most of the assembly, only make $30 per device, or less than 3% of the iPhone’s total retail value. The remaining value is captured by Apple (brand, software, design), component makers (Qualcomm, Broadcom, Samsung, Sony), and logistics.
To Apple’s credit, the company is aggressively expanding its local footprint. Here's what’s happening behind the scenes:
iPhone 16 Series Assembly: India is now assembling the full iPhone 16 lineup, including Pro models, some of which are being exported to the U.S. and Europe.
Foxconn's Display Module Facility: Apple and Foxconn are investing over $1.5 billion in a new display module plant in Tamil Nadu. This will eventually reduce dependence on imported screens, one of the most expensive iPhone components.
Semiconductor Packaging in Uttar Pradesh: With an investment of $433 million, Foxconn is setting up an OSAT (Outsourced Semiconductor Assembly and Test) facility, which could manufacture up to 36 million display-driver chips annually by 2027.
PLI Incentives: Apple is one of the biggest beneficiaries of India’s Production Linked Incentive (PLI) scheme, designed to boost local manufacturing and make India a competitive global alternative to China.
Together, these developments point to a gradual deepening of India's role in Apple's supply chain, not just in assembly but in component manufacturing too.
Even with local production, two external factors continue to skew prices:
Currency Exchange Rates: The Indian Rupee's relative weakness against the U.S. Dollar means higher conversion costs for any component or service that’s dollar-denominated—including logistics, software services, and some licensing fees.
Retail Markups: Despite Apple opening its official stores in India (Delhi and Mumbai), a large portion of sales still occur via resellers. Many of these vendors factor in logistics, marketing, and operational costs into the final MRP, further pushing the price upward.
Buying an iPhone 16 abroad—say, in the U.S., Japan, or Hong Kong—can save Indian customers anywhere from ₹10,000 to ₹40,000. But before booking a flight or asking relatives to carry one back, here’s what you should consider:
No SIM Slot in U.S. Models: iPhones sold in the U.S. now come without a physical SIM slot and support only eSIMs—potentially causing compatibility issues in India.
Regional Warranty Limitations: Apple may not honor international warranties for certain hardware issues.
Network Compatibility: Some features like 5G bands or FaceTime over cellular may vary by region.
Customs Duties at Indian Airports: If you’re bringing in an iPhone without declaring it, you may face hefty fines or seizures.
That depends on several moving parts:
India becomes a complete manufacturing hub, not just an assembly point.
More components are produced locally, reducing import costs.
The government reduces GST on smartphones.
Apple adopts India-specific pricing to compete with OnePlus, Samsung, and Xiaomi.
Apple continues to prioritize premium brand positioning.
Import duties on components stay high.
Local vendors and retailers continue to operate with high margins.
India is undeniably rising in Apple’s global manufacturing ecosystem. From being just an assembly line to now becoming a potential hub for display modules and semiconductors, the progress is real. And yet, for Indian consumers, that “Made in India” label hasn’t translated into lower shelf prices, at least, not yet.
In the coming years, as deeper localisation kicks in and more components are sourced within India, we could finally see a dent in the India pricing premium. Until then, for most Indians, buying an iPhone remains an investment, and a statement.
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