Apple plans to switch production of US-sold iPhones to India, reported The Financial Times. According to sources, the reason is President Donald Trump’s ongoing trade war with China, pushing Cupertino to look for a more economically viable solution.
The diversification of iPhone production started in 2017, when Apple and Wistron started manufacturing iPhone 6s and iPhone SE at the Bengaluru factory. The primary reason was the high import taxes for Chinese goods, and eventually, Apple moved more production as the trade war between the United States and China intensified during Donald Trump’s first term.
According to a report from April 2024, about 14% of all iPhones in the world are made in India, and analysts expected the share to grow to 25% by the end of this year. This number may grow further, though, as Apple will aim to double production to source from India the over 60 million iPhones sold annually in the United States by the end of 2026.
China has been the subject of President Trump’s most aggressive tariffs, and despite Tim Cook’s attempt to negotiate an exemption, it might not happen after all — no decision appears to be final with the administration of the 47th president.
In theory, imports from China are to be subjected to 145% tariff. Even if smartphones were temporarily exempted, Apple still has to pay a 20% rate that was applied even before Donald Trump became president for the second time.
A tariff of 26% also hit India, although this is paused for 90 days to allow New Delhi to negotiate a deal with Washington. US Vice President JD Vance is currently visiting India, claiming the two countries were making “very good progress.”
FT added that the United States accounted for about 28% of Apple’s global iPhone shipments in 2024. Investors and analysts are still struggling to understand the impact of Trump’s tariff plans, as the company prepares for a quarterly earnings report next week.