Donald Trump's tariffs unlikely to derail Apple's iPhone manufacturing in India: Here's why

Mint

5 days ago

The United States' decision to impose 25 per cent tariffs on Indian goods is expected to have minimal impact on Apple's growing reliance on India as a key iPhone manufacturing base, according to analysts and industry insiders. Despite concerns over increased costs for American consumers, experts believe the move is unlikely to disrupt Apple's long-term production plans in the region.
Notably, the tariff measure, announced by President Donald Trump and taking effect on Friday, has sparked concern among Indian businesses. However, industry observers suggest the decision may be more strategic posturing than a sign of long-term trade hostility.
In recent months, Apple has shifted much of its India-based iPhone production to cater almost entirely to the US market. Between March and May, Foxconn, one of Apple's primary manufacturing partners, exported iPhones worth $3.2 billion from India, with nearly all units destined for the United States.
'It's too early to determine whether this development will reshape Apple's manufacturing roadmap in India,' said an executive familiar with the company's plans. 'These decisions are made with a longer horizon in mind.'
Data from Counterpoint Research shows India supplied 71 per cent of all iPhones sold in the US between April and June, compared to just 31 per cent during the same period last year, a shift largely driven by a dip in exports from China.
The trend reflects Apple's broader strategy of reducing dependency on Chinese factories amid mounting geopolitical tensions. Analysts argue that, even with the added tariffs, producing iPhones in India remains a financially viable option, thanks to factors such as lower labour costs, improved local sourcing of components, and government incentives.
'India continues to be one of Apple's two primary manufacturing hubs alongside China,' said Tarun Pathak, Research Director at Counterpoint. 'Making supply chain changes this close to new model releases is highly complex. Business will likely continue as usual.'
Trump has frequently criticised Apple for assembling its products overseas, voicing frustrations over the company's moves to expand production in countries like India instead of returning jobs to the US.
In a remark from May, Trump reportedly told Apple CEO Tim Cook: '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.'
Despite such statements, analysts believe Apple is unlikely to reverse course. Faisal Kawoosa, chief analyst at Techarc, noted that Apple may absorb increased costs rather than hinder its India expansion.
'iPhones in the US are mostly sold through operator deals,' he said. 'Rather than raising retail prices, the added cost might simply be spread over consumers' monthly instalment plans.'
(With inputs from Reuters)