As reported by the Financial Times the company is looking to reduce its reliance on its Chinese manufacturing base because of Donald Trump’s imposition of tariffs. So, could China’s loss be India’s gain?
Like many companies Apple has been caught up in the aggressive tariff policies of the Trump administration and it appears that it wants to shift production to India, and that could be as soon as 2026. Despite a subsequent roll-back on the imposition of tariffs and smartphones having avoided the heaviest Chinese tariffs, Apple is still exposed to a 20% levy on all Chinese goods because of China’s alleged role in producing Fentanyl – according to Trump.
iPhones are manufactured using more than 1,000 components sourced from all over the world, and Apple has long been secretive about its production processes. Despite the secrecy analysts have estimated that around 90% of iPhones are finally assembled China.
Reports suggest that Apple will look to source 60m iPhones sold in the US annually from India by this time next year – a move that will require Indian manufacturing capacity to be doubled.
The company’s main Indian suppliers, Foxconn and Tata, have already shipped $2bn worth of handsets to the US as Apple has looked to offset the impact of looming tariffs and Apple made the news when it was revealed that 1.5m iPhones had been airlifted to US to ensure sufficient inventory.
Apple currently has three plants in India along with a number of additional operations.
Apple is not expected to move iPhone production to the US, even if that is the expressed ambition of the Trump administration, simply because manufacturing an American-made iPhone would almost treble the cost and see consumers paying well over $3,500 for each handset.
Critically, the US simply doesn’t have the facilities or the trained labour to produce iPhones domestically – like many countries in the West it would need to train upwards of 300,000 people to meet the levels of demand currently seen and how feasible is that?
