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Qatar Tribune
3 days ago
- Business
- Qatar Tribune
The Trump effect: Apple shifts operations from China to India amidst ongoing tariffs, trade war
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 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 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.
New Indian Express
24-05-2025
- Business
- New Indian Express
Why Apple is expanding iPhone production in India despite Trump's objections
CHENNAI: Apple's contract manufacturer for iPhone production, Hon Hai Precision Industry Company—better known as Foxconn—announced earlier this week that it is moving forward with a $1.5 billion display module plant in India. The announcement, made through an exchange filing at the London Stock Exchange, came just a few days after former US President Donald Trump publicly criticised Apple's strategy to expand iPhone production outside the US. He later proposed a 25% tariff on iPhones manufactured abroad—a move that appears more transactional than practical. Foxconn stated it will invest $1.49 billion in one of its Indian subsidiaries, Yuzhan Technologies (India) Pvt Ltd. The new facility is expected to be established in Tamil Nadu, where Foxconn already operates a large iPhone production unit. Industry experts view this as a strategic move driven by sharp economic calculations. 'Apple should continue scaling operations in India, leveraging government incentives and supply chain growth, while maintaining minimal production in the US for optics and political goodwill,' they say. Here is a comparative analysis of India and the US in the context of Foxconn's recent move: The Strategy India presents a cost-effective, incentive-driven, and geopolitically strategic environment for iPhone manufacturing. While US political figures such as Donald Trump express concerns over production moving offshore, the realities of cost, labor, and supply chain economics heavily favor India. Foxconn's latest $1.5 billion investment in India underscores its intent to scale up operations there, especially given the absence of equivalent-scale investments in the US. Currently, India accounts for approximately 15% of Apple's global iPhone production, while the US contributes only a small fraction.
