1 week Ago
In a move to beat the heat of rising tariffs, Apple is shifting a portion of its iPhone production to India, looking to sidestep the blistering costs on Chinese imports, according to a Wall Street Journal report citing sources. The $2.3-trillion tech giant may look to reduce the impact of hefty 54% tariff slapped on imports from China by the US President Trump.
The company's shares are down nearly 26% this year so far as investors nervously watch the tariff war between the US and China unravel. Tech Insights estimates that the 54% tariff could add about $300 to the production cost of an iPhone 16 Pro, which is already priced at around $1,100 in the US. That means Apple could soon be looking at a $1,400 iPhone.
But here’s where the India move could help—by shifting production to a country with lower tariffs, Apple may want to minimise the impact on its prices and, more importantly, its profit margin. Apple has reportedly requested an exemption from the new tariffs, much like the one it secured during Trump’s first term. While waiting for a response from the Trump administration, Apple CEO Tim Cook may have decided to shift some of the production to India, where the import tariffs are set at 26%, with room for negotiation and a trade deal.
Will this shift be permanent? With cheap labour and less tariff, India does offer a credible alternative to China but Cook will want to see scale before making a full switch. Apple supplier Foxconn's iPhone assembly line in India started manufacturing in 2019. So far, India adds only $30 worth of value to a $1,000 iPhone, according to an estimate shared by Emkay Global, a Mumbai-based research and broking firm.
However, in a likely situation where the tariff war escalates further, and Trump imposes the 104% tariff that he has threatened, moving more of the iPhone production to India would make sense for Apple. Either way, one thing’s clear: the world’s most valuable company is adapting, in the face of one of the biggest trade wars in modern history..
