Apple manufacturing partner Foxconn has begun manufacturing iPhone XR models at its facility in India, according to sources speaking with ET Telecom.

Apple and Foxconn have reportedly been running tests over the past few weeks in order to get the factory ready to go online and that has now happened. The factory is said to be producing iPhone XR handsets, with iPhone 11 also to be added to the mix in the same facility, located near Chennai.

The company has just started commercial production of the iPhone XR locally at the Foxconn facility near Chennai after undertaking trials for several weeks, reflecting a move up the manufacturing value chain in India. Following this, Apple plans to start making the latest iPhone 11 series. Making the iPhone XR involves a higher level of technical skill, the executives said. Apple will export the devices to other markets after having tested the waters with the export of iPhone 6s and 7 models to Europe in the past few months.

Apple will not only remove some of its reliance on Chinese iPhone manufacturing with this move, but alsos ave money on import duty. Although those savings will not be passed on to the customer, the source notes.

While Apple will be able to save around 20% in import duty through local manufacturing of the iPhone XR, the executives said this won't lead to any price drops. Apple hasn't cut prices on any of its locally made iPhones.

Apple is acutely aware that the United States and China remain in a trade war and tariffs continue to escalate, although there is cause for optimism. Moving production outof China where possible is a smart move.