Apple (AAPL) today (Sept. 9) revealed its latest iPhone 16 lineup, along with the new Apple Watch and AirPods, all available on Sept. 20. This will be the first time Apple manufactures the iPhone Pro models in India, as the Cupertino, Calif.-based tech behemoth continues shifting its supply chain away from China. It also marks a milestone for the Indian government, which aims to establish the South Asian country as a global hub of consumer electronics manufacturing.

Apple first began assembling iPhones in India in 2017, making the iPhone SE and old iPhone models, in an attempt to diversify its supply chain from China. This effort was accelerated during the Covid-19 pandemic, when a Chinese factory unexpectedly seized production due to lockdown-related protests, causing major delays in iPhone deliveries to customers during the 2022 holiday season. Apple is not the only U.S. tech giant diversifying away from China post-Covid; Microsoft and Amazon have moved some of the Xbox and Fire TV manufacturing from China to India and Vietnam, respectively.

Apple’s iPhone manufacturing in India is ramping up quickly. In its last fiscal year ended in September, Apple doubled its iPhone production in India to $14 billion worth from the previous year, Bloomberg reported in April. Today, 1 in 7 iPhones sold globally are made in India. Apple aims to make a quarter of all iPhones in India in the next four years.

In 2023, Foxconn, Apple’s largest contractor headquartered in Taiwan, announced a $1.5 billion investment in the southern Indian state of Tamil Nadu, a $600 million plant in Karnataka, and a $500 million plant in Telangana. These state-of-the-art factories will be set up to assemble iPhone 16 Pro and Pro Max models in the country for the first time. Foxconn now produces two-thirds of all the iPhones built in India. Indian conglomerate Tata Group, the first domestic manufacturer of iPhones, has promised to make India’s largest factor for producing Apple products.

Meanwhile, the Indian government is offering generous subsidies to Apple’s manufacturing partners to build plants in the country. These subsidies include a “production-linked incentive” scheme, which gives revenue-based annual payouts to manufacturers like Foxconn for up to five years, which helps soften the massive fixed costs that go into building new plants. The scheme began in 2020 and expects to pay out $20 billion over five years.

Another incentive for Apple to shift manufacturing to India is the rising geopolitical tension between China and India, stemming from a 2020 border dispute. This conflict led India to ban several Chinese-owned companies, including TikTok, from operating in the country. India also imposes high tariffs on Chinese electronics and technology products, including Chinese-manufactured iPhones. The tariffs have posed challenges for Apple to grow market share in India, where its rising middle class is driving demand for Apple’s premium products. In the 12 months ended March, Apple sales in the country grew 33 percent from the year prior.

Apple opened its first retail store in India in 2023. Despite holding only 6 percent of the country’s smartphone market, CEO Tim Cook called India a “huge opportunity” in a June 2023 interview with CNBC.