Apple exports 2.9 million iPhones from India to US, China sees big fall: How and why 25% tariff threat may not solve Trump's 'little problem' with India

Time of India

a day ago

Apple's iPhone shipments from India to the United States soared 76% in April 2025, reaching 3 million devices as the tech giant accelerates its manufacturing shift away from China, a move that has created what President Donald Trump calls his "little problem" with
Apple CEO Tim Cook
. The surge comes as Trump pressures Apple to abandon its Indian expansion and bring iPhone production to American soil instead, threatening a 25% tariff on all iPhones not manufactured domestically.
Data from technology analyst firm Omdia shows a dramatic reversal in Apple's supply chain, with iPhone shipments from China to the US plummeting 76% to just 900,000 units over the same period. The shift represents Apple's strategic response to Trump's tariff policies, which impose a 30% duty on Chinese-made iPhones while maintaining a baseline 10% rate for other countries including India.
The manufacturing pivot gained momentum after Trump's "reciprocal tariffs" implementation in April, prompting Apple to charter emergency cargo flights carrying 600 tons of iPhones from India to beat tariff deadlines. The company secured a "green corridor" arrangement at Chennai airport, slashing customs clearance from 30 hours to six hours.
Trump's manufacturing ultimatum creates Apple dilemma
President Trump has made Apple's domestic manufacturing a personal priority, revealing he had a "little problem" with CEO Tim Cook during recent discussions. "I told Cook India can take care of themselves, they are doing very well," Trump stated, demanding Apple increase US production instead of expanding in India.
The confrontation escalated when Trump posted on Truth Social: "I expect their iPhone's that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S."
This pressure campaign echoes Trump's first presidential term, when similar demands failed to materialize significant domestic iPhone production. The challenge stems from fundamental structural issues that Apple founder Steve Jobs identified in 2011, telling President Obama that manufacturing jobs "aren't coming back" due to America's skills gap in precision manufacturing.
Industry experts estimate US-made iPhones would cost approximately $3,500 compared to the current $1,000 price tag, requiring Apple to invest $30 billion over three years to relocate just 10% of its supply chain domestically. The iPhone's complex assembly involves 2,700 different parts from 187 suppliers across 28 countries, with less than 5% currently manufactured in the US.
India emerges as Apple's manufacturing lifeline
Apple's Indian strategy, launched in 2017 with older iPhone models, has evolved into a comprehensive manufacturing base producing the complete iPhone lineup, including premium titanium Pro models. The company now manufactures most iPhones destined for the US market in India, with Bank of America analysts estimating Indian facilities will serve 100% of American demand.
The timing proves fortuitous as India faces only a 26% tariff rate, currently paused for 90 days, compared to China's 30% levy. Apple's Indian production capacity is projected to reach 25 million iPhones annually by 2026, sufficient to meet quarterly US demand of 20 million devices.
"India remains the only potential manufacturing destination for any player beyond China as the ecosystem is mushrooming," explains Tarun Pathak, Research Director at Counterpoint, citing lower-cost English-speaking skilled labor, world-class software talent, and favorable government policies.
Despite Trump's pressure, Indian officials express confidence in Apple's commitment. "There is no change in Apple's investment plans in India," a government source told CNBC-TV18, with Apple having "assured the Indian government" of continued investment.
Supply chain reality check against political pressure
The manufacturing shift faces obstacles from both Washington and Beijing. Trump's tariff strategy aims to force domestic production, while China reportedly restricts access to high-tech machinery and talent needed for Apple's Indian suppliers.
Dan Ives, global head of technology research at Wedbush Securities, calls US iPhone production "a fairy tale," emphasizing that "Apple will continue to plow ahead on the India path." The structural challenges include America's manufacturing skills deficit, with former Apple executives noting that China can "fill multiple football fields" with tooling engineers while the US struggles to fill a single room.
Omdia's Le Xuan Chiew warns that India's manufacturing capacity growth may not match demand immediately, noting "It's still too early" for complete supply chain migration. However, India's role as Apple's "life raft" under current tariff conditions appears secure, with the country positioned to strengthen its position as a critical manufacturing hub regardless of political pressures from Washington.
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