India Becomes Crucial Node in Apple's Tariff-Battling Export Strategy

Arabian Post

19 hours ago

Foxconn's latest customs data confirms that from 1 March to 31 May 2025, an overwhelming 97 per cent of all iPhones assembled in India were destined for the United States, totalling $3.2 billion in exports—nearly double the 50 per cent average seen throughout 2024. May alone accounted for almost $1 billion, the second‑highest monthly export value ever recorded—just behind March's $1.3 billion.
This sharp shift reflects Apple's concerted effort to navigate escalating U.S. tariffs targeting Chinese exports, under a policy framework that now imposes 55 per cent duties on Chinese-made goods. India, by contrast, is subject to only a 10 per cent base tariff—with ongoing negotiations aimed at averting a proposed additional 26 per cent reciprocal levy.
Apple's strategic manoeuvres go well beyond plant output figures. In March, it chartered aircraft to ship around $2 billion worth of iPhone models—including the 13, 14, 16 and 16e series—from Chennai to the U.S.. Concurrently, it has lobbied Indian customs officials to streamline clearance time at Chennai Airport from approximately 30 hours to just six.
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Tata Electronics—the smaller of Apple's Indian manufacturing partners—also ramped up its U.S.-bound export rate, shipping an average of 86 per cent of its March‑April output abroad, compared to just 52 per cent across 2024.
Analysts at Counterpoint Research estimate that Apple's production capacity in India will contribute 25–30 per cent of global iPhone shipments by the end of 2025, up from 18 per cent in 2024. Industry insiders note that Tamil Nadu has become India's iPhone manufacturing epicentre, hosting some 70–80 per cent of domestic output through facilities run by Foxconn, Pegatron and Tata, and leverages major infrastructure investments to support scale‑up.
The strategic pivot has not gone unnoticed in Washington. Donald Trump voiced disapproval in Doha, urging Apple to prioritise U.S.-based manufacturing over Indian operations. He cast the policy shift as unwelcome, stating he did 'not want you building in India' and emphasised domestic production, although analysts warn it would be economically unfeasible—potentially tripling iPhone prices—if Apple were to replicate its Chinese supply chain in the U.S..
Despite vocal criticism from Trump, India's government continues to cultivate its appeal as a high‑tech manufacturing hub under the 'China Plus One' model. Prime Minister Narendra Modi's administration has facilitated green corridors and industrial investments, particularly in Tamil Nadu, aiming to amplify smartphone exports. The state's industrial minister and private‑sector leaders have pointed to India's growing workforce and operational readiness as key strengths.
However, the pathway is not without hurdles. High duties on imported components continue to hinder cost efficiency, even as trade negotiations between New Delhi and Washington seek to secure tariff relief. India remains more expensive than other manufacturing hubs unless concessions are secured.
Still, the numbers speak convincingly. Foxconn's India exports hit $4.4 billion to U.S. shores in just the first five months of 2025—already exceeding the full‑year 2024 tally of $3.7 billion. Simultaneously, India's mobile‑electronics exports raced ahead, reaching approximately $12.8 billion in 2024, with iPhones now powering nearly 70 per cent of that figure.
India's climb in Apple's supply chain mirrors broader geopolitical shifts—illustrating how trade pressure, tariff regimes and national strategies are reshaping global manufacturing. As Apple continues to amplify operations in India, the region is fast developing into a pivotal node in the technology economy—offering a compelling alternative to the long-established China corridor amidst deepening trade tensions.