Will Trump's 25% tariff affect India's iPhone manufacturing plans?

Apple is expected to maintain its manufacturing push in India despite US President Donald Trump’s latest decision to impose a 25% tariff on Indian goods, according to analysts and industry executives cited by Reuters. While the tariffs may raise smartphone costs for American consumers, they are unlikely to derail India’s growing role as a major iPhone production hub.

Between March and May this year, nearly the entire $3.2 billion worth of iPhones exported from India by Foxconn were destined for the US market, with Apple’s India production now aligned almost exclusively to serve American demand, Reuters reported.

An industry executive familiar with Apple’s operations told Reuters that it is "too early to say" whether recent developments or potential future shifts in Trump’s trade policies will influence Apple’s India manufacturing roadmap. “These plans are made with a longer window,” the executive added.

Trump’s latest tariff announcement, made on Wednesday and set to take effect on Friday, has unsettled Indian businesses. However, some observers see it more as a negotiating tactic than a long-term policy direction.

India has emerged as a critical piece of Apple’s global manufacturing strategy, particularly as the company seeks to reduce reliance on China amid ongoing geopolitical tensions. Data from Counterpoint Research shows that India accounted for 71% of iPhones sold in the US between April and June, more than double the 31% share from the same period a year earlier, mirroring a corresponding decline in shipments from China.

Despite the new tariffs, analysts told Reuters that India remains cost-competitive for iPhone production. Component availability, government incentives, and labour costs roughly half those in China have helped narrow the cost gap, cementing India’s position as a key iPhone manufacturing location alongside China.

“Making supply chain adjustments, particularly with new iPhone models nearing release, is unlikely due to the complex factors involved,” said Tarun Pathak, research director at Counterpoint. “It is expected to be business as usual, especially with a resilient supply chain like Apple.”

Trump’s Long-standing Grievances

Trump has consistently criticised Apple for manufacturing US-bound iPhones outside the country. His threats have included company-specific tariffs, though high production costs, technical limitations, and regulatory challenges have so far prevented Apple from fully shifting production stateside.

According to Reuters, Trump said in May that he had told Apple CEO Tim Cook: “We put up with all the plants you built in China for years... we are not interested in you building in India, India can take care of themselves.”

Nevertheless, Apple appears willing to absorb the higher costs rather than disrupt its India expansion strategy. Faisal Kawoosa, chief analyst at research firm Techarc, told Reuters that US iPhone sales are largely operator-driven and bundled with mobile plans, meaning the impact of price increases may be softened.

“It might mean adding a few more dollars to monthly plans rather than giving an upfront blow to consumers,” he said.