Apple has increased the number of flights carrying iPhone consignments from India to the US following Donald Trump’s tariff blitz.
Three Indian officials with knowledge of the issue said at least 10 flights have taken off from Chennai International Airport since the announcement of Trump’s “liberation date.”
Apple is relying on deepening its ties with India to counter the immediate impact of the US president’s aggressive Chinese tariffs after failing to obtain a last-minute exemption from Washington’s 104% tax on the country that came into effect Wednesday.
Two Indian officials told the Financial Times that the US technology giant is considering further investment in the country. “Apple is definitely thinking about doing more in India,” one official said. Apple declined to comment.
Apple is one of the biggest casualties of the US President’s tariff blitz on Wall Street, losing market value of around $700 million since its announcement last week — underscoring the dilemma the group is facing and building its business on China’s advanced manufacturing industry.
According to Bank of America analyst Wamsi Mohan, booking the entire production of iPhones for the US will cover over 550 million iPhones shipped to the US each year.
“I think they did some of that work to mitigate some of the impacts in a very near period, but that’s clearly not a long-term sustainable kind of solution,” Mohan said.
According to a survey by CounterPoint, Apple has quietly grown its business in India, particularly since the coronavirus pandemic caused chaos in China’s supply chains, but has around 80% of smartphone manufacturing in China.
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On Wednesday, MK Stalin, the prime minister of Tamil Nadu, India’s southernmost state with four of the country’s five iPhone factories, met with Andy Priestley, executive of leading Apple supplier Jabil, who last year announced a memorandum of understanding with the state to expand its facilities.
US-based Jabil has not spoken publicly about Apple’s supply in India. In X, Stalin said the conference was about “making new business investments in Tamil Nadu.”
India is being targeted by Trump with a sudden 27% “mutual” tariff, but the country has been trying to leave him behind by launching talks about a bilateral trade agreement with the US that it hopes Indians can reduce their tariff burden.
Moreover, India is expected to be one of the beneficiaries of Trump’s announcement on Wednesday, and he had suspended additional tariffs on a wide range of countries that are willing to negotiate with the US. These countries will be subject to 10% collection for exports to the US.
Apple’s stock rose sharply after Trump’s statement on his true social platform. The US president later expressed the prospect that some individual companies are exempt from the effects of mutual tariffs, saying, “We’re going to look at it.”
Apple has a strong leaning towards India for now, but has no supply chain in the country to significantly promote production. In the long run, you will be subject to considerable tariffs and will need to find a way to raise the prices of premium electronics or swallow the additional costs.
Several analysts said they expect prices to come later this year from Apple as the expected new iPhone launch in September is likely to spread the impact of US tariffs around the world.
Apple could apply pricing pressure to its suppliers and pass some of the impact from the tariffs, they said.
A more cumbersome concern for Apple is how Trump promotes the “Made in America” iPhone. The administration doubled the idea that Apple could start manufacturing iPhones in the US. This is what experts say is not only astronomically expensive for the company, given how deep China’s bonds will become, but unrealistic.
“Trump believes we have workforce, we have the workforce and we have the resources to do that,” White House press chief Caroline Leavitt said Tuesday that he repeated the sentiment expressed by Commerce Secretary Howard Lutnick over the weekend.
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Estimates by analysts at Morgan Stanley show that even a portion of the iPhone supply chain would cost Apple “billions of dollars” to shift to the US. Wedbush analyst Dan Ives estimated it would cost three years and three years to move just 10% of the supply chain from Asia to the US.
“This is a company that has been incorporating itself into China and Southeast Asia for decades, and now it appears that it’s forced to change the whole thing that we’re thinking about building and pricing the iPhone.”
Pressure is settling despite Apple pledging to hire 20,000 staff in February as part of its $500 million US spending plan for the next four years, including new facility manufacturing servers for Texas artificial intelligence.
The fact that Apple currently does not operate its own manufacturing facilities, but outsources them to Asian-based companies, has grown 20 years and billions of dollars of specialized equipment, adding an additional layer of complexity.
iPhone assemblies are now carried out in mainland China by companies such as Foxconn and Pegatron in Taiwan, and not so much in India, where Tata is building its capabilities as an Apple supplier. This is the final step in a vast chain of Apple suppliers, most of which are currently based in Asia.
There are 387 individual parts in the final assembly of the iPhone 16, including chips, circuit boards, batteries, wires, lenses, screens, metal and plastic parts, according to TechInsights, a market research group.
Apple’s latest public supplier list covering 2023 shows 187 companies responsible for 98% of the company’s direct spending that year. Of these companies, 169 had a manufacturing presence in mainland China and Taiwan.
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Beyond China, the company faces pressure across its supply chain. Vietnam, a leading MacBook exporter, has been hit with 46% tariffs despite an offer from the country’s government to reduce taxation on US goods to zero.
Assembling iPhones in the US is “technically” possible, said Bank of America’s Mohan, but the question was “whether the components being procured to make iPhones will become tariffs,” he added. “If that’s the case, it’s a big headache.”
Following a call with an executive at LuxShare, another major Apple supplier, Bernstein analysts said they confirmed their view that moving iPhone assembly to the US was “unrealistic” as it “continues to rely on Asian components subject to tariffs.”
