Apple plans to shift the entire assembly of its iPhones from China to India. Triggered by Donald Trump’s trade war, the tech giant aims to source over 60 million iPhones from India by 2026.
Supply Chain Diversification
Investors expected Apple to diversify its supply chain, but this shift is quicker and more extensive than anticipated, doubling India’s iPhone output.
After nearly two decades of substantial investment in China’s production line, Apple will transition from manufacturing most iPhones in China via third parties like Foxconn.
Apple’s value fell by $700bn
Following the announcement of tariffs by Trump, which wiped $700bn off Apple’s market value. Trump has since provided a temporary relief from tariffs on smartphones, though China remains a significant focus for the President and his administration.
Apple has been gradually increasing its production capacity in India in recent years, with contract manufacturers Tata Electronics and Foxconn, while still assembling most of its smartphones in China. The assembly of iPhones is the final stage in the production process, involving the integration of numerous components, many of which Apple continues to source from suppliers in China.
Negotiations with India
India was initially subjected to a reciprocal tariff of 26 per cent, which is currently paused while New Delhi seeks a bilateral trade agreement with the US. During a visit to India this week, US Vice-President JD Vance mentioned that the two countries were making “very good progress”. JD Vance’s wife is Indian.
Apple would need to further increase capacity in India to meet US demands. Last year, the iPhone maker aimed to boost production from India, with Foxconn and Tata starting to import pre-assembled component sets from China.
Indian Prime Minister Narendra Modi and President Donald Trump have a strong working relationship. During Modi’s visit to Washington in February, Trump announced expanded military sales to India along with increased oil and gas exports.
Historically, India has aligned more with Russia, with its neighbour, Pakistan, aligning more with the US. However, tension between China and India, which has led to military skirmishes in the far North, may help improve US-India relations. Nonetheless, Modi is committed to prioritising Indian businesses in procurement and protecting India’s farm sector from US subsidies on food production.
India currently has a trade surplus of 11% with the US, but both Modi and Trump aim to double trade between the two countries to $500 billion by 2030.
