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iPhone Production Begins at Tata’s New Facility as Foxconn Gears Up, Signaling Apple’s Growing Focus on India

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Apple is steadily expanding its manufacturing footprint in India, with a new plant in southern India recently commencing iPhone production. This move marks a strategic effort to diversify production away from its primary manufacturing base in China, which has faced challenges amid escalating trade tensions between the US and China. The new facility, operated by Tata Electronics in Hosur, Tamil Nadu, has begun assembling older iPhone models, signaling Apple’s commitment to scaling operations in the region.

The backdrop to this expansion is the ongoing trade war between Washington and Beijing, where US tariffs on Chinese goods have raised concerns about supply chain disruptions and increased costs. Although electronics have so far been exempted from tariffs, the threat of future levies has prompted Apple to seek alternatives. India’s growing manufacturing ecosystem and favorable government policies have made it an attractive destination for Apple to mitigate risks and reduce dependency on Chinese production.

In addition to Tata Electronics’ plant, a $2.6 billion facility run by Foxconn is nearing completion in Bengaluru, Karnataka. According to multiple sources, the Foxconn plant is expected to start initial operations soon, with production ramping up through one assembly line initially. The factory is projected to produce the latest iPhone 16 and 16e models and will eventually create around 50,000 jobs when it reaches full capacity, anticipated by the end of 2027.

This expansion reflects Apple’s long-term vision to strengthen its supply chain resilience and capitalize on India’s manufacturing potential. By establishing multiple production hubs in India, Apple not only reduces its exposure to geopolitical risks but also taps into a vast and growing market. The company’s investment signals confidence in India as a vital player in the global smartphone supply chain in the years to come.

Indian IT Sector’s Fiscal 2026 Outlook Dimmed by Weak US Demand and Trade Tensions

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India’s information technology (IT) sector, one of the worst-performing industries this year, is unlikely to see a strong recovery in fiscal 2026, according to analysts. The outlook remains uncertain, following recent warnings from Accenture, the world’s largest IT services firm, which cited weak discretionary spending and lackluster demand from its clients.

Accenture’s quarterly report flagged that client budgets remained flat, with little growth in discretionary project spending. The company also noted that global trade tensions, exacerbated by new U.S. tariffs, have further dampened prospects in the United States, a key market for Indian IT firms.

Amit Chandra from HDFC Securities noted that the last few months have heightened uncertainty about the first half of fiscal 2026 and how this will affect the overall recovery rate for the year. As of now, India’s IT index has dropped 15.3%, marking its worst performance since June 2022. Major firms such as TCS, Wipro, Infosys, and HCLTech have seen losses ranging from 11.2% to 18.1% this year.

Analysts from Kotak Institutional Equities warned that a soft recovery in demand and fewer mega deals in fiscal 2025 will result in slower revenue growth in fiscal 2026 for Indian IT companies. The impact of early-stage adoption of generative AI is also expected to present challenges, they added.

Research from Citi and Morgan Stanley forecast modest growth, with Citi estimating 4% revenue growth for IT companies in fiscal 2026, similar to fiscal 2025, and Morgan Stanley highlighting subdued client spending as a key factor limiting growth. However, sectors like banking, financial services, insurance (BFSI), and healthcare have shown some signs of recovery, although many clients are currently in a “wait-and-watch mode,” potentially leading to further reductions in spending.

Accenture’s report also indicated that U.S. clients have delayed or canceled new contracts, partly due to the Trump administration’s policies, which could increase competitive pressures in other segments, despite Indian IT companies having limited exposure to these delays.

MediaTek Prepares for Potential US Tariffs Amid Uncertainty

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MediaTek, Taiwan’s leading chip design firm, has been running simulations in anticipation of potential U.S. tariffs on Taiwanese goods, according to CEO Rick Tsai. Despite the uncertainty surrounding this issue, Tsai expressed confidence that the impact would be “manageable” in 2025.

Taiwan’s tech industry, including giants like TSMC, faces the risk of tariffs as U.S. President Donald Trump has proposed such measures to incentivize semiconductor production within the United States. On the campaign trail, Trump criticized Taiwan for allegedly taking U.S. semiconductor business.

Trump has outlined plans to impose tariffs on imported chips, as well as other products such as pharmaceuticals and steel, though no specific timeline has been set. When asked about the potential effects on MediaTek, Tsai referred to the situation as “very unpredictable,” but assured that the company is taking proactive measures, such as simulations, to prepare for the possible changes.

Although Tsai acknowledged the unpredictability of the situation, he believes the impact of any tariffs in the short term will be manageable, especially for 2025. “There are so many variables, so it’s very difficult to give an accurate estimate now,” he said.

In addition to trade concerns, MediaTek is facing pressure from the rise of DeepSeek, a Chinese AI startup whose lower-cost models are posing a challenge to Western tech investments in chipmakers and data centers. Despite this, Tsai remains optimistic about the AI market, noting that the spread of AI will benefit average users.

MediaTek’s shares have outperformed the broader market in 2025, showing a 7.8% gain so far, while the overall market has gained only 1.9%. However, the company’s shares closed flat on Friday.