Donald Trump’s announcement of a 25% tariff on Indian exports threatens to disrupt Apple’s strategy of making India a major iPhone export hub for the US. The new tariffs, set to take effect on August 1, will levy a significant tax on iPhones manufactured in India and shipped to the United States. This could impact Apple’s manufacturing and export plans.
Industry analysts note that the tariffs could negatively impact Apple’s plan to make India a major export hub. Roughly a quarter of Apple’s iPhone shipments to the US currently originate from India.
Apple has been increasing iPhone production in India, mainly through Foxconn, as part of its China-plus-one strategy. Half of the iPhones shipped to the US were recently made in India. Apple has a dominant 55% share of the premium smartphone segment in India.
Apple could respond in several ways, from absorbing the tariff costs to increasing prices for consumers. They face challenges due to rising component costs, including the costly new TSMC 3nm chips, and may need to cut costs elsewhere or increase prices. Samsung, for example, has adjusted prices for its foldables.
During the April-June quarter, Apple exported over $5 billion worth of iPhones from India, representing around 70% of the country’s total smartphone exports, according to preliminary data.