Trump's tariff on India to do little to upset iPhone manufacturing plans

By Munsif Vengattil

BENGALURU -President Donald Trump's 25% tariffs on native american goods testament do small to slow down the role of the asiatic country as a key hub for manufacturing iPhones, even when it means more expensive smartphones for U.S. Consumers, analysts and industry executives said.

Apple has realigned its India exports to almost exclusively serve the U.S. Market, with nearly all the $3.2 billion-worth iPhones exported by Foxconn from India going to the United States between March and May.

It's "too early to say" if recent events or future changes in Trump's stance will alter Apple's manufacturing plans in India, an industry executive familiar with Apple's strategy said. "These plans are made with a longer window."

Trump on Wednesday imposed a 25% tariff on goods imported from the country, effective Friday, a move that sent jitters across India Inc, though some view it as a negotiation tactic.

For Apple, India is now central to its strategy of diversifying manufacturing beyond China, where geopolitical pressures have pushed it to consider alternative bases.

India supplied 71% of all iPhones sold in the U.S. Market between April and June, up from 31% a year earlier, driven by a corresponding decline in shipments from China, according to Counterpoint Research.

Despite the newly announced tariffs, manufacturing iPhones in India would continue to remain cost-competitive, with expenses lower than when Apple began production there eight years ago, narrowing the cost gap with China, analysts said.

Factors like growing local component availability, federal government incentives, and wages nearly half those in China have positioned India as one of the top two iPhone-producing countries, alongside China.

"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," said Tarun Pathak, a research director at Counterpoint.

TRUMP'S IRE

Trump has repeatedly targeted Apple for making U.S.-sold iPhones outside the country by threats including company-specific tariffs, but hurdles like high costs, technological shortcomings, and legal issues have stood in the way.

In May, he recalled telling 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".

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

"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".

This article was generated from an automated news agency feed without modifications to text.

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