NEW DELHI Apple Inc’s annual sales in India hit a record of almost US$8 billion , underscoring a rapidly growing market where the iPhone maker now assembles more of its devices and operates two flagship stores.

The India revenue jumped about 33% in the 12 months through March from US$6 billion a year earlier, according to a person familiar with the matter. Apple’s pricey iPhones accounted for more than half of the sales, said the person, who asked not to be named as the information isn’t public.

The increase signals steady progress in Apple’s effort to win users in the world’s most populous country, whose consumers are gradually gaining more purchasing power as the economy expands. The company is targeting India as a way to diversify its manufacturing and revenue sources beyond much larger market China, which has become riskier because of trade tensions with the US.

Apple gained as much as 2.2% in premarket trading in New York on Monday to US$235.59.

Apple doesn’t break out India revenue in its earnings statements, but it is required to report annual sales in the country to local authorities. Apple representatives in India didn’t respond to requests for comment.

The Indian market is dominated by cheaper Chinese devices using Google’s Android mobile operating system, and iPhones make up just about 3.5% of the country’s roughly 690 million smartphones in use, according to Counterpoint Research. Even though India is one of Apple’s fastest-growing markets, the South Asian nation accounts for only about 2% of its latest fiscal-year sales of US$383 billion.

Chief executive officer Tim Cook is trying to change that.

He visited India last year to open the country’s first two Apple Stores that sell iPhones, iPads, MacBook computers and other devices and accessories. India’s steadily expanding middle class, which views Apple products as status symbols, could gradually help the company cut its sales dependence on China.

Apple’s revenue in China shrank in the latest fiscal year to US$72.6 billion as the economy cooled, though iPhone sales have rebounded strongly in recent months on heavy discounting by retailers. But tensions between the US and China have prompted the company and other global technology firms to pivot more toward India as the next growth market.

Apple has also been rapidly expanding its manufacturing push in India. For now, it makes models including the latest iPhone 15 in the country, but not the higher-spec Pro and Pro Max models. It exports most of the devices assembled in India.

Apple’s India-based assembly partners doubled production to US$14 billion of iPhones in the country last fiscal year, Bloomberg News previously reported. That means Apple now makes as much as 14% or about one in seven of its marquee devices in India.

On Apple’s earnings call in May, Cook said the company was working on everything from developers to markets and operations in India.

“I see it as an incredibly exciting market and it’s a major focus for us,” he said.

  - Bloomberg