Apple (AAPL, Financial) plans to transition all U.S.-bound iPhone assembly to India by 2026, according to a report from the Financial Times citing unnamed sources familiar with the company's plans. The shift reflects Apple's ongoing efforts to diversify its supply chain away from China as geopolitical tensions and trade uncertainty continue to escalate.

Production in India has already ramped up in recent years. A new Foxconn (FXCOF, Financial) facility in Bengaluru is expected to come online by the end of this month, according to CNBC-TV18. Alongside Tata Electronics, Foxconn is one of Apple's key manufacturing partners in the country.

While smartphones have so far been exempt from U.S. tariffs, Commerce Secretary Howard Lutnick recently suggested those exemptions may not be permanent. That possibility appears to be pushing Apple to accelerate its relocation strategy.

In 2024, Apple reportedly built 12 million iPhones in India through Foxconn, with plans to grow that number to between 25 million and 30 million units this year. The U.S. market accounted for about 63.25 million of the 225.9 million iPhones Apple shipped globally in 2024 — meaning the company would need to roughly double Indian production by next year to fulfill its 2026 goal.

It's important to note that Apple shares jumped 5.66% over the past week, outpacing the S&P 500's 3.91% gain. However, the stock has trailed over longer time frames, falling 5.71% over the past month and 9.73% in the last six months — underperforming sector medians of minus 4.82% and minus 5.51%, respectively. Year-to-date, Apple is down 16.9% compared with a 6.7% decline for the benchmark. Over a one-year period though, Apple has gained 23.1%, well ahead of the sector median gain of 8.2%.

While Apple still relies heavily on China for component manufacturing, its goal of fully relocating U.S. iPhone assembly to India by 2026 marks a significant step in restructuring its global production footprint.