Will Trump tariffs affect India's role as iPhone manufacturer? What experts say

Between April and June, India reportedly supplied 71 per cent of all iPhones that were sold in the US market, a 31 per cent increase from last year.

US President Donald Trump's 25 per cent tariff on India will not cause much change to New Delhi's role as a key manufacturing hub for iPhones, even though it will mean more pricey smartphones for Americans.

Analysts said manufacturing iPhones in India would remain cost-competitive despite the recently announced tariffs. (Reuters)

Apple Inc. moved its India exports almost exclusively for the US market, with nearly all of the $3.2 billion worth of iPhones exported from the country by Foxconn going to the United States between March and May, Reuters reported.

Concerns over which sectors would be at the most risk were raised after Trump imposed the 25 per cent tariff and an unspecified penalty for its purchases from Russia.

An industry executive familiar with Apple's strategy said that it is "too early to say" if the recent developments or future changes in the US President's stance will affect Apple's manufacturing plans in India. "These plans are made with a longer window," he added.

iPhone manufacturing in India

At present, India stands at the centre of Apple's strategy to diversify its manufacturing beyond China, where geopolitical concerns have forced the company to look at alternatives.

Between April and June, India supplied 71 per cent of all iPhones that were sold in the US market, a 31 per cent increase from last year, the news agency reported, citing Counterpoint Research.

Analysts said manufacturing iPhones in India would remain cost-competitive despite the recently announced tariffs. They added that expenses would be lower than when Apple first began production in India eight years ago, bridging the cost gap with China.

India has positioned itself among the top two iPhone-producing countries, alongside China, because of its federal government incentives, availability of local components, and wages nearly half of those in Beijing.

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

India's smartphone exports

India also overtook China to become America's top source for smartphones, one of the reasons being Apple Inc.'s move to assemble more of its iPhones in the country.

India's smartphone exports to the US increased almost fivefold in the past three years. The country's smartphone exports rose by 55 per cent to USD 24.14 billion in 2024-25 from USD 15.57 billion in 2023-24 and USD 10.96 billion in 2023-23.

Of these, the exports to the US alone increased from USD 2.16 billion in 2022-23 to USD 5.57 billion in 2023-24 and USD 10.6 billion in 2024-25.

The tariff's impact on smartphones would reportedly not be as straightforward because the Trump administration had in April exempted smartphones, computers and other electronics from reciprocal tariffs, according to a Bloomberg report.

Following this, the US Commerce Department had used Section 232 of the Trade Expansion Act to launch investigations into sectors that are essential for national security, such as semiconductors. Until these probes are complete, smartphone exports to the US will not face any tariffs.

However, if Trump decides to use his powers under Section 232 to impose duties on iPhone imports to the US, then it could force the company to limit suppliers, including those in India.

Apple in India: What has Trump said?

The US President has consistently targeted Apple for making US-sold iPhones outside the country with threats, including company-specific levies. But obstacles like high costs, lack of technological backup, and legal issues have always stood in the way.

He recalled telling Apple CEO Tim Cook on May that "we put up with all the plants you built in China for years... we are not interesting in you building in India, India can take care of themselves".

Faisal Kawoosa, chief analyst at Indian research firm Techarc, said that Apple Inc. would rather absorb the higher costs for iPhones sold in the US than to hit the brakes on its expansion in India.

"Given that sales in the U.S. are largely operator-driven and sold as part of plans, it might mean adding a few more dollars to monthly plans rather than giving an upfront blow to consumers," he added.

(with agencies inputs)