In a significant shift aimed at mitigating the financial impacts of rising trade tensions, Apple has announced plans to relocate the assembly of the majority of iPhones sold in the United States to India.
This move comes as the tech giant seeks to reduce its dependency on China, where it currently manufactures 80% of the iPhones sold in the US.
Apple, valued at over $3 trillion, is reportedly in talks with key manufacturing partners, including Foxconn and India’s Tata Group, to increase production in India. By the end of 2026, Apple aims to have the majority of its iPhones for the US market assembled in India, according to sources close to the matter.
The company’s shift in production is largely driven by the ongoing tariff war between the US and China, particularly under the administration of former President Donald Trump. The rising tariffs on Chinese goods have added significant costs to Apple’s operations, and the move to India is seen as a strategy to mitigate these financial burdens. This decision could double the current output of iPhones from India, which already accounts for a significant portion of the company’s global production.
India as global manufacturing hub
Indian Prime Minister Narendra Modi has been actively promoting the country as a global hub for smartphone manufacturing. In a bid to attract tech giants like Apple, India has taken steps to improve its manufacturing environment, including removing import taxes on certain components used in mobile phone production.
“It’s crucial for India to remain competitive. By reducing import taxes on intermediary goods, the country positions itself to be a leading global manufacturing hub,” said Babak Hafezi, CEO of Hafezi Capital, in an interview with Al Jazeera.
In March 2025, Apple shipped a record $2 billion worth of iPhones from India, marking a significant milestone in the company’s Indian operations. Despite this growth, however, India still produces only 20% of the world’s iPhones, indicating the scale of the challenge Apple faces in relocating much of its production.
Economic and logistical challenges
However, moving a significant portion of iPhone production to India is not without its challenges. Manufacturing in India is reported to be 5-8% more expensive than in China, and the logistical hurdles in the country could further drive up costs. Analysts have warned that the process of transitioning iPhone assembly from China to India could take years, with some estimating that it could cost Apple as much as $30-40 billion.
Dan Ives, an analyst at Wedbush Securities, expressed caution about the move, stating, “While India will help, it will take years to reduce Apple’s dependence on China. The roadblocks are significant, and Apple is still caught in the middle of a complex tariff situation.”
Recent reports have also suggested that Chinese authorities have made it difficult for Apple’s suppliers to shift operations to India. Delays in shipments and blocked equipment exports have been reported, with some companies like Foxconn experiencing export applications being denied or delayed for months.
India’s Infrastructure Challenges
While India offers potential cost benefits, the country’s infrastructure issues may pose a major challenge to large-scale production. Experts have raised concerns about the country’s ability to handle the surge in manufacturing capacity, citing problems such as traffic congestion and inefficiencies in mobility.
“They have massive infrastructure problems that could increase production costs,” said Hafezi. “In order to be globally competitive, secure and efficient infrastructure is essential.”
Global Trade Implications
Apple’s shift in production comes at a time when the US and China appear to be on the brink of a trade deal. In a recent interview with TIME magazine, former President Donald Trump mentioned that discussions had taken place between the US and China regarding potential tariff reductions, though China has denied these claims.
Meanwhile, trade discussions between the US and India are ongoing, with Vice President JD Vance meeting with Indian officials to discuss a potential bilateral trade agreement. The growing economic ties between the two countries may further facilitate Apple’s move, offering both financial incentives and strategic advantages.
