Why iPhones Cost More in India Despite Being Assembled Locally

India has become one of Apple’s fastest-growing markets, and in recent years, more iPhones sold here proudly carry the “Assembled in India” tag. Yet, the excitement often fades when buyers look at the price tag. Even with local assembly, iPhones remain significantly more expensive compared to countries like the U.S., China, or even Dubai.

So why does assembling iPhones in India not translate to lower prices for Indian consumers? The answer lies in a mix of taxes, import duties, supply chain realities, and Apple’s premium positioning.

Assembly vs. Manufacturing: The Critical Difference

The first thing to understand is that assembling a phone in India is not the same as manufacturing it here. While the final stages of production—like putting parts together—happen in Indian factories, most of the high-value components such as chipsets, camera modules, displays, and memory units are still imported.

These imports attract heavy duties before they even reach Indian assembly plants. In simple terms, India is doing the last step of the process, not the entire production cycle. Until more of these components are made domestically, local assembly won’t have a major impact on pricing.

The Tax and Duty Burden

Smartphone pricing in India is also shaped by a complex layer of taxes and duties. Import duties on individual parts can range between 10% and 22%. On top of that, the Goods and Services Tax (GST) of 18% is applied to the final product.

This means by the time an iPhone reaches store shelves, the base production cost has already risen by nearly a third due to taxation alone. Even when Apple assembles iPhones here, these taxes continue to weigh heavily on the final price tag.

Apple’s Premium Image Strategy

Apple doesn’t just compete on features; it competes on perception. The company has always marketed the iPhone as a luxury product, and in India, that status symbol is even stronger.

Instead of slashing prices, Apple maintains its premium image by offering financing options, exchange programs, and limited-time discounts. This ensures the brand remains aspirational while still accessible through payment flexibility—without lowering the sticker price itself.

Distribution and Dealer Margins

Another hidden factor is India’s retail structure. A large chunk of iPhone sales comes from third-party resellers rather than Apple’s own stores. These middlemen add their own margins, often ranging from 8% to 12%, to cover logistics, marketing, and operational costs.

While Apple has started opening flagship stores in India, the majority of its sales still pass through these reseller networks, which contributes further to inflated prices.

The Changing Landscape: Signs of Progress

Despite the current high prices, there are positive changes happening. Apple and its suppliers are steadily expanding deeper into India’s supply chain.

• New facilities are being set up to produce displays and other high-cost components domestically.
• Chip packaging and testing plants are being built to reduce reliance on imports.
• Analysts predict that by the end of 2025, as much as 60–65% of iPhones sold worldwide could be manufactured in India.

India has also adjusted import duties on some parts, aiming to attract more investment and ease the cost burden. While these steps haven’t yet translated into cheaper iPhones, they indicate a future where local production could meaningfully cut prices.

Will iPhones Ever Be Cheaper in India?

The big question remains: will Indian consumers see noticeably lower prices in the near future? The answer is mixed.

Prices could come down if:

• More components are manufactured domestically.
• The government revises import duties and GST policies.
• Apple introduces India-specific pricing strategies.

Prices may stay high if:

• Apple continues protecting its luxury branding.
• Reseller margins and layered taxes remain unchanged.
• The shift from importing to local sourcing takes longer than expected.

The Bottom Line

The “Assembled in India” tag on iPhones is an important milestone for the country’s manufacturing ambitions, but it doesn’t yet mean affordability for buyers. Taxes, import dependence, and Apple’s market positioning continue to keep iPhone prices higher than in other regions.

Still, the future looks promising. As India becomes a bigger hub for Apple’s global production and as more components start rolling out of Indian factories, the cost equation may eventually tip in favor of local buyers. Until then, owning an iPhone in India will remain as much about prestige as it is about technology.