INTRODUCTION

Recently, the President of the United States of America, Donald Trump, took a public stand against Apple’s decision to expand its manufacturing to India. He was on a visit to Qatar, where he said he had asked Tim Crook, CEO, Apple Inc., not to follow through with the company’s plan to manufacture in India. He mentioned that he would rather that Apple increase its production in the United States. This comes after India had offered a waiver on tariffs on US companies to set up manufacturing investments. 

Apple has had a significant presence in India over the last few decades. Because of the rise in tensions between the US and China, the company has tried to diversify its supply chain. The company has chosen India as one of its manufacturing hubs. 

Now, Trump’s opposition to Apple’s manufacturing in India has sparked discussions about the impact on global supply chains and trade relations. The future of tech manufacturing is also being discussed in this context. This blog explores this development and examines the potential impacts on Apple, India, and the broader technology industry. 

BACKGROUND: APPLE’S MANUFACTURING SHIFT

Apple has been strategically diversifying its manufacturing operations to lower risks typically associated with over-reliance on one country. This shift has been visible in recent months, and India can significantly benefit from it. It shows India’s importance in Apple’s global supply chain. Contributing factors were India’s favourable trade policies and competitive labour costs. 

India even overtook China as the top exporter of iPhones to the United States in April 2025 with a 76% year-on-year increase.³ Apple’s manufacturing partner, Foxconn, had announced a 1.5 billion US dollar investment in its India operations.

Apple’s journey in India so far: 

Apple entered the Indian market in August 2008 with the launch of iPhone 3S, but the company’s presence remained limited and faced high import duties and a price-sensitive consumer base. A shift occurred in 2017 when Apple started local assembly of iPhones for the first time at Bengaluru with its iPhone SE model. This reduced costs associated with import duties and made iPhone more accessible in India. In April 2023, the company inaugurated its first official retail store in Mumbai and then in Delhi. By late 2024, many of Apple’s high-end models, such as iPhone 16 Pro, were assembled in India. 

TRUMP’S RECENT TARIFFS

President Donald Trump recently intensified pressure on Apple to relocate its manufacturing operations to the United States. Trump announced that a 25% tariff will be levied on iPhones produced outside of US. He stated, “”I have long ago informed [CEO] Tim Cook of Apple that 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,”

Imposing such tariffs may lead to increased production costs, which could increase the final cost for the customers. Relocating to the US also comes with additional challenges, such as high labour costs and a need to establish a fresh supply chain. 

IMPLICATIONS FOR INDIA

Apple’s decision to expand its manufacturing footprint in India came with significant benefits for India, such as the upliftment of India’s economy. However, Trump’s declared 25% tariffs on iPhones manufactured outside the United States, including those assembled in India, pose significant challenges. 

1. Disruption to India’s ‘Make in India’ movement: ‘Make in India’ policy has aimed to attract global tech giants such as Apple to establish manufacturing bases in India, but now with the newly imposed tariffs, Apple may no longer be incentivised to open manufacturing hubs in India, affecting ‘Make in India’ policy.
2. Potential economic setbacks: The proposed tariffs may end up making Indian-manufactured iPhones less competitive in the United States’ market as the price would increase for the ultimate consumer. Apple’s shift away from India can result in job losses and reduced FDI (Foreign Direct Investment), which can impact India’s broader goals. 
3. Strain on US-India Trade relations: The tariffs may put a strain on the trade relationship between the US and India. India has positioned itself as an ally to the US, but imposing tariffs on Indian manufactured goods may be seen as a punitive measure that can add diplomatic tensions between the two countries. 
4. Long-term considerations for India: In spite of the immediate challenges, India’s cost advantage would still exist. Even with the 25% tariffs, manufacturing iPhones in India would still be more economical compared to the US due to lower labour costs. This cost-effectiveness may encourage companies to maintain their operations in India despite the additional tariffs. A US-made iPhone would cost 1500 to 3000 USD more due to higher wages in US. 
5. Impact on Micro, Small and Medium Enterprises (MSMEs): The foundation of India’s manufacturing sector is made up of Micro, Small, and Medium-Sized Enterprises (MSMEs), which frequently supply and support bigger businesses.  If big companies like Apple leave the market, it will result in lessor orders for these MSMEs, which results in reduced sales and reduced profits. This will also have an effect on industries that are an important part of the electronics supply chain, such as component manufacture and packaging. 

LESSONS FOR INDIA 

How Trump has responded to the expansion of Apple’s manufacturing to other countries shows how worldwide, there is a battle for tech supremacy and dominance in trade. This shows how the world order is shifting. Weaknesses and opportunities are cropping up for India. 

This is a wake-up call for India. Admittedly, Apple’s investment has had a good boosting effect on India’s manufacturing sector, but the country does not need to depend on Apple for its development. Currently, India has yet to fully develop its innovation sector. India only spends 0.7% of its GDP on Research and Development (R&D), which is quite low in comparison to the US (which spends 3%) and China (which spends 2.4%). India can shift from being a manufacturing hub to a full-fledged innovator by investing in R&D and developing technologies such as Artificial Intelligence (AI). 

CONCLUSION

Trump’s idea to keep manufacturing of iPhones limited to the US is idealistic and ignores the ground reality. The US does not have enough cheap and skilled labour or the cost efficiency to support mass production of iPhones to meet the demand. 

The tariffs that Trump has proposed, although they present a lot of challenges, open India’s door to other opportunities. As the geo-political environment keeps on changing, policymakers and industry leaders need to join hands and engage in constructive dialogues and negotiations. India too should focus on developing its infrastructure and labour force. Policy reforms at this stage will be crucial for India as a global manufacturing powerhouse. 

AUTHOR: SARGUN SINGH

REFERENCES

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