Trump does not want Tim Cook to build in India. Can Apple afford to do so?

First Post

15-05-2025

US President Donald Trump remarked on Thursday that he does not want Apple CEO Tim Cook to 'build' products in India, citing the country's 'high tariffs'. While the Republican leader wants the iPhone maker to make its products in America, analysts believe it is unlikely to happen. Here's why read more
The price of iPhone could triple if it is made in the US. File Photo/Reuters
United States President Donald Trump does not want Apple to build its products in India. The Republican leader expressed his opinion at a business event in Qatar's Doha on Thursday (May 15).
Trump said that he had a 'little problem' with Apple CEO Tim Cook. 'I said to him, my friend, I am treating you very good. You are coming up with $500 billion, but now I hear you are building all over India. I don't want you building in India. You can build in India, if you want to take care of India because India is one of the highest tariff nations in the world, so it is very hard to sell in India,' the US President said.
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While claiming that New Delhi has offered a zero tariff rate on US imports, Trump said, 'They (India) offered us a deal where basically they have agreed to charge us literally no tariffs. I said Tim, we are treating you really good, we put up with all the plants you built in China for years. We are not interested in you building in India. India can take care of themselves.'
New Delhi has not made any such remarks about dropping all tariffs on US goods.
However, Trump's plan for Apple to make its products in the US is not feasible. In fact, it could triple the price of the iPhone.
Let's take a closer look.
iphones in India
India currently makes up for about 14 per cent of global iPhone assembly, according to the Economic Survey 2023-24.
The US tech giant is now hoping to make the most of its iPhones sold in the US in India by the end of 2026, a source told Reuters.
Apple sells more than 60 million (six crore) iPhones in the US every year, of which roughly 80 per cent are presently made in China.
China makes about 90 per cent of the about 200 million (20 crore) iPhones that Apple sells around the world annually, reported New York Times (NYT).
According to estimates from Evercore ISI, China accounts for Apple's 80 per cent manufacturing capacity. In recent years, Apple has diversified its supply chain beyond China to countries like India and Vietnam.
The Cupertino-based tech giant assembled iPhones worth a whopping $22 billion in India in the 12 months ending March 2025, a sharp 60 per cent hike from the previous fiscal year, according to a Bloomberg report.
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India now accounts for 20 per cent of Apple's total iPhone production, or one in every five units made globally.
A woman lines up outside a store selling the Apple iPhone 16 in Jakarta on April 11, 2025. File Photo/AFP
The iPhone maker has three plants in India – Foxconn's mega plant in Tamil Nadu and two more – another in Tamil Nadu and the third in Karnataka, which are run by the Tata Group. Two more Apple plants are in the pipeline.
Apple projected last year that producing its high-end iPhone 16 Pro and Pro Max models in India would bring down costs by 10 per cent. However, due to taxes and component costs, the retail price of the devices would remain unchanged, according to a report by The Economic Times.
Make-in-US is a bad idea for Apple
Analysts have warned that manufacturing iPhones in the US would be very expensive.
iPhones made in the US could cost more than three times their current price of around $1,000, Dan Ives, global head of technology research at financial services firm Wedbush Securities, told CNN.
'You build that (supply chain) in the US with a fab in West Virginia and New Jersey. They'll be $3,500 (Rs 2.99 lakh) iPhones,' he said, referring to fabrication plants, where computer chips powering electronic devices are usually manufactured.
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Apple would have to bear a cost of $30 billion over three years to shift just 10 per cent of its supply chain to the US, Ives added.
The Bank of America (BofA) forecasts that moving iPhone production to the US would nearly double the cost of making the device, along with creating logistical headaches.
'iPhone cost can increase 25 per cent purely on higher labour cost in the US,' BofA analysts led by Wamsi Mohan wrote in a note to clients in April.
Mohan said that the price of the iPhone 16 Pro, which costs $1,199 (Rs 1.03 lakh), could jump 25 per cent based on just labour costs. A made-in-the-US iPhone 16 Pro could be priced at $1,500 (Rs 1.29 lakh).
As per the BofA analyst, the labour cost for assembling and testing an iPhone in America would be $200 (Rs 17,098) per iPhone, a rise from $40 (Rs 3,420) in China.
Experts say that Trump's dream of making iPhones in the US would meet various challenges, including finding and employing a US workforce and tariff costs that Apple would have to bear for importing parts to America for final assembly.
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Analysts and industry watchers believe Apple is unlikely to shift production of its iPhones to the US.
'It's just not a reality that on the time frame of imposing tariffs that this is going to shift manufacturing here. It's pie in the sky,' Jeff Fieldhack, research director at Counterpoint Research, told CNBC.
Apple's biggest challenge is that the US does not have the same workforce as China. 'The army of millions and millions of human beings screwing in little screws to make iPhones, that kind of thing is going to come to America,' Commerce Secretary Howard Lutnick said on CBS.
As per JP Morgan, the price of iPhones would be only two per cent more if the final assembly were done in India instead from China, raising the devices' cost from $986 (Rs 84,293) to $1,008 (Rs 86,174). However, a US-made iPhone would see a 30 per cent surge to $1,285 (Rs 1.09 lakh).
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US tariffs on China stings Apple
Apple has been scrambling to shift its production from China to India after Trump imposed 145 per cent tariffs on Chinese imports to the US last month.
The iPhone maker has already ramped up manufacturing in India to avoid Trump's high tariffs. Apple shipped some 600 tonnes of iPhones worth $2 billion from India to the US in March, as per Reuters.
This week, the US and China have agreed to lower tariffs on goods traded between the two nations. America's taxes on Chinese imports will plunge to 30 per cent from 145 per cent, while China's tariffs on some US imports will fall to 10 per cent from 125 per cent. The reduction in tariffs imposed by the US on Chinese goods will bring some relief to Apple.
The US tariffs on India are far below China. In April, the Trump administration imposed 26 per cent taxes on Indian imports. America has since paused most duties for three months.
Trump's inauguration in January has hit Apple with its shares losing around 25 per cent of their value due to concerns about the impact on its supply chain from the US tariffs.
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However, 'Made in the US' seems to be a pipe dream. In 2011, when the then US President Barack Obama asked the late Apple CEO Steve Jobs about making an iPhone in America, Jobs replied: 'Those jobs aren't coming back.'
With inputs from agencies