Trade negotiations lead Apple’s iPhone manufacturers to move from China to India
In this DML Report…
Apple plans to shift the assembly of all iPhones sold in the U.S. to India by the end of 2026, moving away from China to avoid steep tariffs imposed by the Trump administration, according to a Financial Times report. The company, which sells over 60 million iPhones annually in the U.S., currently produces 80% of them in China but is accelerating its pivot due to escalating U.S.-China trade tensions. Apple is in urgent talks with manufacturers Foxconn and Tata to double India’s iPhone production, a move spurred by Trump’s tariffs on Chinese imports, which include a 20% duty on smartphones and potential new levies on semiconductor-heavy products.
India has become a key manufacturing hub for Apple, with $22 billion worth of iPhones assembled there in the fiscal year ending March 2025, a 60% increase from the previous year. About 20% of global iPhones are now made in India, primarily at Foxconn’s Tamil Nadu campus and Tata’s facilities, supported by India’s government incentives under Prime Minister Narendra Modi. The shift aims to mitigate geopolitical risks and tariff costs, as the U.S. remains Apple’s largest market, accounting for 28% of its global iPhone shipments in 2024. However, experts estimate that fully moving production out of China could take up to eight years due to infrastructure and labor challenges.
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The transition reflects broader tech industry trends to diversify supply chains amid U.S.-China trade conflicts, with Trump’s policies already costing Apple $700 billion in market value in early 2024. India’s lower tariffs—26% compared to China’s 54%—make it a viable alternative, though the U.S. lacks the capacity for large-scale iPhone assembly. Apple’s move counters Trump’s push to bring jobs home while aligning with India’s ambition to become a smartphone manufacturing hub. Analysts note this could help Apple maintain growth, but the shift’s success hinges on India’s ability to scale infrastructure and skills to meet demand.