The Great Decoupling: Apple, India, and the Strategic Migration of U.S. Manufacturing

There was a time when “Made in China” felt as inevitable as death and taxes. Not anymore. Apple Corporation, the high priest of global capitalism, is recalibrating its compass, and it now points squarely at India. What once sounded like a contingency plan has hardened into doctrine.

As revealed by the Financial Times, Apple intends to shift all iPhone assembly for the U.S. market from China to India by the end of 2026. This is not just a symbolic gesture. This transition is a strategic move to diversify Apple’s supply chain and reduce its dependence on China. The move will require doubling capacity in India, with production partners like Foxconn and Tata Electronics leading the charge. Already, $10 billion worth of iPhones have been produced in India between April and October 2024 alone, with $7 billion shipped abroad. In just four years, Apple has created 175,000 direct jobs in India. These figures underscore the magnitude of Apple’s shift and the growing significance of India in the global tech supply chain.

The Incremental Shift Away from China

Apple’s move is the culmination of years of incremental disengagement from China, driven less by ideology than by necessity. The shift began around 2017, when Apple responded to growing political pressure in Washington to diversify its supply chain. In 2019, amid escalating U.S.-China trade tensions, Apple quietly ramped up production trials in Vietnam and India, shifting some AirPods and Beats headphone assembly out of China. The COVID-19 pandemic intensified the urgency: lockdowns in Shenzhen and Zhengzhou disrupted production schedules and revealed the fragility of Apple’s overconcentration in one country. In 2022, Foxconn’s iPhone City in Zhengzhou faced labor unrest, triggering supply shortfalls and global shipping delays. By 2023, Apple had moved a growing share of iPad and MacBook assembly to Vietnam and Malaysia and had begun co-developing infrastructure in southern India to support high-end device manufacturing. Each step was calibrated, but unmistakable: the center of gravity was shifting.

Yet, the move away from China is not merely the result of geopolitical shifts but is also tied to a broader corporate strategy. Over the past few years, Apple has faced mounting competition in the Chinese market, where its once-dominant position has been eroded by local rivals. In Q1 2025, Apple’s sales in Greater China declined by 8%. This decline is a consequence not just of trade tensions but of deeper structural changes within China’s consumer landscape. Increasing competition from homegrown brands, particularly Huawei, which has capitalized on technological innovation and patriotic sentiment, has made it more difficult for Apple to maintain its foothold. Meanwhile, shifting consumer preferences have increasingly favored local alternatives, often seen as more affordable and just as capable in terms of functionality.

The trade war has added a compelling geopolitical rationale to ongoing economic pressures, making the shift away from China a strategic necessity for both corporate and national interests.

India’s Economic Ambitions and the UK Free Trade Agreement

In contrast to China, India offers significant advantages: a pliable workforce that is both young and tech-literate, and perhaps most importantly, a government eager to accommodate U.S. corporate interests. New Delhi has seized the opportunity, leveraging its Production-Linked Incentive (PLI) scheme, which has turned India into an export powerhouse for smartphones. iPhone shipments from India are poised to account for 25% of Apple’s global output by Q4 2025, signaling India’s growing role in the global manufacturing landscape.

But India’s ambitions extend far beyond contract manufacturing. As Western firms grow increasingly wary of Chinese entanglements, India is positioning itself as the indispensable alternative. This strategy aligns seamlessly with New Delhi’s broader diplomatic ambitions, particularly its near-final free trade agreement with the UK.

The Anglo-Indian trade deal, years in the making, is nearing completion and may be signed before the Indian state elections later this year. The agreement includes tariff cuts on electric vehicles and Scotch whisky, as well as enhanced access for services and investment. Negotiations that had long stalled over issues such as agricultural access, visa rules for Indian professionals, and concerns over data protection have now been bridged through a mix of political will and calibrated concessions. The UK has relaxed visa caps for skilled Indian workers, while India has agreed to more predictable rules on digital trade and intellectual property.

What makes this even more attractive to international investors is India’s legal framework. As a common law jurisdiction grounded in English jurisprudence, India offers regulatory predictability that is familiar and reassuring to global investors and legal teams.

U.S. multinationals seeking alternative production hubs are finding an increasingly favorable environment in India, bolstered by its negotiations with the UK. The UK’s trade policies have created a more investment-friendly landscape, marked by minimal government red tape, legal certainty, and political stability. For companies like Apple, which are looking to mitigate risks in their supply chains, this is a critical advantage. 

India shows that the U.S.-UK special relationship, if properly managed, serves as a potent instrument of statecraft, enhancing both nations’ strategic influence on the global stage.

A Mutual Need Dressed as Economic Liberalism

The UK sought a trade ally outside the EU, and India sought prestige, capital, and leverage. What it amounts to is mutual need, cleverly disguised as economic liberalism. This alliance fits neatly within the framework of President Trump’s “America First” agenda, which emphasized a break from multilateral dependencies in favor of bilateral trade agreements that prioritize national interests.

While President Joe Biden continued to advocate for “supply chain resilience,” it is President Trump who has been actively reshaping the global (dis)order with his focus on decoupling, tariffs, and tech bans. This rupture in global trade is forcing a rethinking of the entire post-Cold War economic framework. President Trump’s policies aren’t merely a footnote—they are a decisive turning point that accelerates the migration of manufacturing away from China, placing India at the center of changing global supply chains.

India: The Bridge Between East and West

India has stepped into the gap left by China, not because it is flawless, but because it is available. China is increasingly uninsurable, Vietnam is too small, and Mexico is too close to political instability. Only India has the scale, workforce, and political stability to offer the West an attractive alternative to China. Apple’s shift is more than a logistical move; it is a statement about the emerging global order—a recognition that the factory of the world is migrating, and the age of strategic innocence is over.

JD Vance, the key architect of the strategic vision for America’s shifting global alliances on behalf of President Trump, has long emphasized the importance of India as a critical player in the West’s economic and geopolitical realignment. When Tim Cook next unveils a phone assembled in Tamil Nadu, he won’t merely be showcasing a product; he will be echoing Vance’s vision. India is no longer just a manufacturing hub—it has become a cornerstone in the West’s economic and geopolitical realignment. But New Delhi has much to thank the White House for in its rise; the Trump administration’s policies are paving the way for India’s deeper integration into the Western fold, making its central role in shaping the future of global trade and diplomacy all but inevitable.

Bepi Pezzulli is a Solicitor of the Senior Courts of England and Wales specializing in Governance as well as a Councillor of the Great British PAC. He tweets at @bepipezzulli

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