Apple shifts US iPhone production from China to India
Apple plans to shift the assembly of all iPhones sold in the United States from China to India by the end of 2026. This move is largely driven by the need to avoid steep tariffs imposed by the U.S. government on Chinese imports amid ongoing trade tensions, particularly tariffs as high as 145% on goods from China.
Currently, about 80% of the approximately 60 million iPhones sold annually in the U.S. are assembled in China. To meet U.S. demand, Apple will need to roughly double its iPhone production in India to over 80 million units per year. Apple has been manufacturing iPhones in India since 2017, initially with more affordable models, and began assembling flagship models there in 2023. The company is working with major manufacturing partners like Foxconn and Tata, which operate multiple factories in India and plan to expand capacity.
This strategic shift is part of Apple’s broader supply chain diversification to reduce geopolitical risks and tariff-related cost pressures. Although India itself faces some tariffs, they are significantly lower than those imposed on China. The Indian government is supporting this transition with production-linked incentives and subsidies to boost electronics manufacturing.
💰 Economic and Trade Considerations
The shift to Indian manufacturing is also influenced by economic factors. Apple has faced significant financial pressures due to tariffs, including a reported $300 billion loss in market value in a single day in April. While manufacturing costs in India are approximately 10% higher than in China, the move helps Apple mitigate the impact of U.S.-China trade disputes.
Additionally, India currently faces a 26% tariff on exports to the U.S., but negotiations for a trade agreement are underway, and the tariff has been paused for 90 days amid these discussions.
Despite the shift in assembly, Apple remains heavily reliant on Chinese suppliers for components, so fully moving the supply chain out of China will take more time. Nonetheless, this move marks a significant pivot in Apple’s manufacturing strategy, which has been China-centric since the first iPhone in 2007.
In summary:
- Apple aims to produce all U.S.-sold iPhones in India by end of 2026.
- This is to avoid high U.S. tariffs on Chinese imports amid trade tensions.
- Production in India will need to increase to over 80 million units annually.
- Apple partners with Foxconn and Tata in India for manufacturing.
- India offers lower tariffs and government incentives.
- Apple still depends on China for components; full supply chain shift will take years.
- This represents a major shift from nearly two decades of China-centered iPhone production.
🔮 Future Outlook
Apple’s strategic pivot to India represents a significant shift in global manufacturing dynamics. By reducing reliance on Chinese production, the company aims to enhance supply chain resilience amid geopolitical uncertainties. While challenges such as higher production costs and the need for infrastructure development remain, India’s growing capabilities and favorable policies position it as a key player in Apple’s future operations.
This transition not only impacts Apple’s global strategy but also underscores India’s rising prominence in the global technology manufacturing landscape.
Citations:
- https://www.reuters.com/world/china/apple-aims-source-all-us-iphones-india-pivot-away-china-ft-reports-2025-04-25/
- https://www.engadget.com/mobile/smartphones/apple-may-shift-all-us-bound-iphone-production-from-china-to-india-133049630.html
- https://www.wired.com/story/apple-may-shift-to-making-us-iphones-in-india-it-wont-be-easy/
- https://nypost.com/2025/04/25/business/apple-to-shift-most-us-iphone-production-to-india-by-2026-to-avoid-china-tariffs-reports/
- https://uk.finance.yahoo.com/news/apple-move-production-us-iphones-102254064.html
- https://timesofindia.indiatimes.com/business/india-business/apple-to-make-all-us-iphones-in-india-apple-and-us-china-trade-war-made-in-india-iphones-pli-india-and-us-trade-war/articleshow/120605270.cms
