Thanks to Trump, India may become key iPhone making base

Apple may significantly increase its iPhone production in India in the coming years, potentially reaching more than $30 billion annually, according to reports. Currently, the company’s production in India stands at around $15-16 billion a year, but this could grow if certain economic factors play out, particularly the potential impact of tariffs on Chinese imports proposed by US President-elect Donald Trump.

Trump’s tariff plans

Trump has suggested imposing heavy tariffs on Chinese goods, which could lead companies like Apple to reconsider their supply chains. If these tariffs, ranging from 60 to 100 per cent, are enacted, Apple might choose to shift more of its manufacturing operations to India, where production costs are lower than in some other countries. 

Set to double, but how soon?

Over the past three years, Apple has already moved a portion of its iPhone production to India, with reports suggesting that about 12 to 14 per cent of the company’s global output now comes from Indian factories. While more than 85 per cent of iPhones are still made in China, India’s share of the production pie could grow further as Apple adjusts to the changing trade landscape. 

Apple shifts gears

Experts speculate that an increase in US tariffs on Chinese products could accelerate this trend. This shift could not only boost India’s role in Apple’s global supply chain but also have broader economic implications. For one, it may help strengthen trade relations between the US and India, while also providing a boost to India's tech sector. If the increase in production materialises, it could lead to the creation of tens of thousands of new jobs, with some estimates suggesting up to 200,000 positions may be added in India.

Growing piece of the pie

The shift could also increase India's contribution to global iPhone production, potentially raising it from the current 12-14 per cent to over 26 per cent in the coming years. Much of the iPhones produced in India are exported, with the US being a key destination for these products. As the demand for premium iPhone models continues to rise, particularly the iPhone Pro series, this trend could further bolster India’s manufacturing role.

Competition heats up

However, there are challenges that could slow down or complicate this expansion. India still faces issues such as cost inefficiencies and regulatory uncertainty, which could affect the scale of production growth. To support this increase, the Indian government would need to continue initiatives like the Production Linked Incentive (PLI) scheme, which is designed to encourage manufacturing in the country. In addition, neighbouring countries like Vietnam remain competitive with lower production costs, and could present alternative options for Apple in the future.

In summary, while the US-China trade tensions and potential tariff increases could push Apple to ramp up its production in India, the extent of this shift remains uncertain. The coming years will likely reveal whether India can become a more significant hub for Apple’s iPhone manufacturing and whether this will have lasting effects on the global tech supply chain.