US President Donald Trump has been crystal clear in his diktat vis-à-vis Apple Inc: He wants iPhone production back in the US. Trump has even threatened a 25 percent tariff on iPhones assembled in India, reportedly warning Apple CEO Tim Cook directly.
You’d think that kind of pressure would have Apple scrambling to relocate factories stateside. But that's not it. Instead, Apple’s doubling down on India, pouring billions into manufacturing there. Why? It combines shrewd geopolitics, cold, hard economics, and a long-term wager that India's benefits outweigh Trump's tariff threats.
India Remains Affordable
Compared to the US, manufacturing iPhones in India is incredibly affordable. The International Labour Organisation (ILO) estimates that a factory worker in India makes around $230 per month. In California, a similar worker pulls in around $2,900 a month. That’s a 12-fold difference.
Even if Trump slaps a 25 percent tariff on iPhones coming from India, the math still favours staying put. The cost of labour, combined with other expenses like land and utilities, makes the US manufacturing a tough sell.
The government of India is practically rolling out the red carpet for Apple. Through its Production-Linked Incentive (PLI) scheme, India offers cash incentives—up to six percent of the value of goods produced—for companies that boost local manufacturing.
For Apple, that’s millions in savings annually. Since 2021, when the PLI programme kicked in, Apple’s partners like Foxconn and Pegatron have ramped up production, churning out $14 billion worth of iPhones in India last year alone, per India’s Ministry of Commerce. That’s a 100 percent jump from 2022.
The government is also streamlining regulations and offering tax breaks, making it easier for Apple to expand factories in places like Tamil Nadu and Karnataka.
But it’s not just about dollars and cents. Apple’s playing a bigger game.
Slicing Through Chinese Dominance
For years, the company leaned heavily on China for manufacturing—over 90 percent of iPhones were made there as recently as 2019. Then came US-China trade wars, COVID-19-related supply chain chaos, and Beijing’s tightening grip on foreign businesses.
Apple realised it couldn’t keep all its eggs in one basket. India, with its 1.4 billion people and growing middle class, was the obvious pivot.
By 2025, Apple aims to produce 25 percent of its iPhones in India, up from 14 percent now, according to JP Morgan analysts. That’s not just cost-cutting—it’s risk management. If tensions flare with China, Apple’s got a fallback.
Trump’s tariff threats complicate things, but they don’t change the calculus. Moving production to the US may sounds patriotic, but it’s a logistical nightmare. The US lacks the skilled workforce and supply chain infrastructure India’s built up.
India’s got the ecosystem—component makers, assembly lines, and a government that’s hungry for investment. Plus, Apple’s not starting from scratch. Foxconn’s Chennai plant, one of Apple’s biggest, employs 40,000 workers and produces iPhone 16 Pro models—high-end stuff that used to be China-only.
Double Whammy: Factories & Market
There’s also the market angle. India is not just a factory for Apple; it’s a goldmine for sales. With 600 million smartphone users and counting, India’s the world’s second-largest market.
Apple’s iPhone sales there grew 50 percent year-over-year in 2024, hitting $8 billion, per Counterpoint. Local production keeps prices competitive by dodging import duties, which can add 20 percent to a phone’s cost.
If Apple moved manufacturing back to the US, it’d face higher production costs and lose ground in India’s booming market. That’s a double whammy no CEO would sign up for.
Geopolitics seals the deal. Trump’s tariffs are a headache, but they’re not unique. The US has slapped duties on Chinese goods for years, and India’s less likely to end up in a trade war with Washington. Plus, India’s cozying up to the US as a counterweight to China gives Apple diplomatic cover.
Apple is doubling down on India as a strategic manufacturing base, betting on its cost efficiency and geopolitical alignment with the US amid rising trade tensions.
This isn’t just about dodging tariffs on Chinese goods—India’s skilled workforce, government incentives like the PLI scheme, and growing consumer market make it a pragmatic long-term play.
Plus, aligning with a US-friendly partner helps Apple navigate an era of fractured global trade.
So, why is Apple sticking with India? It’s cheaper, it’s strategic, and it’s a hedge against a volatile world. Trump can tweet and threaten all he wants, but Apple’s playing chess while he’s playing checkers. The numbers don’t lie, and neither does the map. India’s where the future’s built—one iPhone at a time.
(Brabim Karki is an author and businessman based in Nepal. He tweets @brabim7. This is an opinion piece, and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)