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The Trump effect: Apple shifts operations from China to India amidst ongoing tariffs, trade war

The Trump effect: Apple shifts operations from China to India amidst ongoing tariffs, trade war

Qatar Tribunea day ago

Agencies
New York
The heat from US President Donald Trump's trade war against China may have turned down a notch after the two countries reached a temporary truce in mid-May, but Trump's tariff policy has created a climate of uncertainty among American companies with operations in China. Tech companies reliant on Chinese components, technology, and skills are particularly hard hit, and under pressure to move their operations away from China, preferably to the US.
Even the iconic Apple iPhone brand has not escaped unscathed. Caught in the crossfire of the US-China trade war and in a bid to avoid falling foul of the resulting economic fallout of the tensions between Washington and Beijing,Apple is gradually moving its iPhone production from China to India.
Trump has temporarily pulled back on his 145 percent tariff hike against China, which in turn suspended its retaliatory tariffs against the US of up to 125 percent.While iPhones are, for now, exempt from US tariffs, the components used for their production are not, and companies like Apple find themselves in the eye of Trump's anti-China tsunami.
Despite a five percent growth in net profit and revenue for its fiscal second quarter,Apple predicts losses in the coming fiscal months as a result of the trade war.Apple CEO Tim Cook, fearful that the trade and tariff situation is unlikely to change, is moving swiftly to protect his company by relocating some of its operations from China to India.
Beijing's loss is becoming New Delhi's gain, with the company indicating that the majority of iPhones in the US market would soon be imported from India, where the company has had a decades-long presence. In 2016,Cook visited the country and announced the establishment of an iOS developers lab in Bengaluru, India's Silicon Valley. In 2022, Apple's investment in India grew further when the company decided to make its iPhone 14 models in that country. Apple's first stores in India opened in 2023.
According to reports, India already makes one in five iPhones used worldwide, assembling $22 billion worth of iPhones between March 2024 and March 2025, and increasing its production by 60 percent as it shifts production away from China. Further boosting Apple's presence in India is the recent decision by the main manufacturer of its iPhones, the Hon Hai Precision Industry Company, to invest $1.5 billion into its India unit. Hon Hai, which has been building new plants and adding production capacity in southern India, is also increasing its investments in the US to mitigate the geopolitical headwinds arising from further tariffs.
Union telecom minister Jyotiraditya Scindia has welcomed the investment by Apple and other original equipment manufacturers (OEM), saying: 'Apple has decided to source and produce all its mobile phones in India in the years to come…you are choosing affordability, you are choosing reliability, you are choosing originality.'
Minister of State for Telecommunication Chandra Sekhar Pemmasani noted India's remarkable transformation from an importer of mobile phones in 2014 to a leading producer and exporter.
Meanwhile, as insurance against the geopolitical impact of the Trade War, Apple, which does not produce smartphones in the US, has pledged to spend $500 billion in America over the next four years and employ more workers domestically.
While Apple and other tech companies operating from China are mulling over their options amidst Trump's see-saw trade policies,the iPhone manufacturer's increased investment in India is a welcome boost for Prime Minister Narendra Modi's 'Make in India' programme. This initiative seeks to create and encourage companies to develop, manufacture, and assemble products in India.

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