Apple plans to switch US iPhone assembly to India in blow to China
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Apple has revealed that it is planning to move the assembly of all its iPhones sold in the US to India, according to the Financial Times. Currently, the company still assembles most of its iPhones in China.
This could potentially take place as soon as next year, as the company attempts to reduce its reliance on China in the wake of the current escalating trade and tariff tensions between the US and China.
At the moment, Apple sells more than 60 million iPhones per year in the US, which could all be produced in India by the end of next year, supporting Apple's goal to diversify its supply chain. If so, current iPhone production in India would have to be doubled, the FT reported on Friday.
In the last several years, Apple has invested significantly in China, in order to build a cutting-edge production line which was vital for the company to establish itself as a global tech leader worth more than $3 trillion (€2.7tn), according to Companies Market Cap.
Apple uses a vast network of manufacturing partners and factories in China, such as Luxshare Precision Industry and Foxconn. These have sprawling production plants in cities such as Zhengzhou, which is also known as 'iPhone City'.
iPhones are also made in other Chinese cities such as Wuhan, Shenzhen, Kunshan, Beijing, Tianjin, Huizhou and Guangzhou, with Apple having a considerably complex assembly process as well.
However, China has now been hit with US levies of up to 145%, while also having imposed its own tariffs against the US, of up to 125%.
Although the US government has recently shared that it is willing to compromise with China, and is also reportedly considering lowering some of these tariffs, Apple's supply chain could still be impacted.
Apple's share price closed 1.8% higher on Thursday on the NASDAQ exchange. However, it fell 5.6% in the last month.
Euronews has contacted Apple for comment.
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Apple ramps up production facilities in India
In India, Apple has already been increasing its manufacturing facilities with contract manufacturers such as Foxconn and Tata Electronics.
The company is mainly setting up bases in southern Indian states such as Karnataka and Tamil Nadu, in cities such as Bangalore, through its suppliers. Foxconn also has a factory in Hyderabad, primarily focusing on AirPods manufacturing.
Some of Apple's other suppliers, such as Pegatron Technology India and Wistron have production facilities in India as well.
However, given how large the US iPhone market is, it is likely that Apple will need to increase its investment in Indian manufacturing facilities even more, in order to fully meet demand and reduce its dependence on China.
Although the US had imposed so-called reciprocal tariffs of 26% on India as well, this has now been paused for 90 days while the country tries to negotiate a bilateral trade agreement with the US. However, the US' universal 10% tariffs are still currently applicable to India.
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Apple is also looking to expand its production facilities in Vietnam, which is already a large Apple manufacturing hub, producing iPads, MacBooks and Apple Watches and iPhones.
Similarly, it is looking into investing in manufacturing facilities in Indonesia, although no concrete plans have been revealed yet.
Apple will be reporting its first quarter 2025 earnings next week, potentially providing investors with a better idea of how tariffs might impact the company in the coming months.
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