Trump Tariff on India: 25% tax to affect Apple's manufacturing plans? Will iPhones now cost more? What experts say
Trump on Wednesday announced a 25 per cent tariff on India, plus unspecified penalties for importing Russian oil. The Trump tariffs on India are slated to kick in from August 1.
India overtook China to become the top supplier of smartphones sold in the US, thanks to Apple's move to shift production of its iPhones to the country.
However, the 25 per cent US tariffs on India can pose a significant risk to this now.
The US makes up around 25 per cent of iPhone shipments for Apple at around 60 million units per year. With the elevated US tariffs on Indian goods, exports to Washington DC may take a hit as Apple will have to pay 25 per cent levy on its iPhone exports from India.
The tariffs imposed by Donald Trump will not only affect Apple's manufacturing in India but might increase cost of iPhones for US consumers.
Apple will have to pay higher tariffs to export iPhones from India to the US, a cost it will likely pass on to consumers there. The only case when iPhone prices in US will not increase is if Apple decides to absorb the cost or shift its manufacturing base elsewhere.
Experts agreed about the impact of Trump tariffs on India on Apple iPhone production
"Today's sudden announcement of 25 per cent tariffs on exports from India to the US will certainly hit Apple's plan of making India as a large export hub for iPhone exports to US," IDC India, South Asia & ANZ, Associate Vice-President for devices research, Navkendar Singh, was quoted as saying by PTI.
'To meet the iPhone demand in the US from iPhone assembled in India requires significant manufacturing expansion in India, which will be directly impacted by these new tariffs,' he added.
CyberMedia Research, Industry Research Group (IRG), Vice President (VP), Prabhu Ram, told the news agency that a dampened demand may prompt Apple to rethink its supply chain.
"For Apple, near-term challenges include higher costs on India-assembled iPhones exported to the US, potentially dampening demand and prompting recalibration of its supply chain. While some long-term shifts towards US-based production are in motion, India will remain a critical lynchpin in Apple's global strategy," he said.
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