India’s ambitions to become a global iPhone manufacturing hub may have hit a bump in the road. In a sweeping move, US President Donald Trump announced “reciprocal tariffs” on more than 180 countries. India — where Apple has recently relocated up to 15% of its iPhone production — has been slapped with a 26% tariff by the US. While that rate is lower than China’s staggering 54% and Vietnam’s 46%, Indian officials aren’t breathing easy.
A senior government source told The Indian Express that while there may be some short-term discomfort, there is hope that the trade agreement with the US could provide some relief. He also pointed out that, as far as Apple is concerned, most of its major production bases are in China, India, and Vietnam. Among them, India has received the lowest tariff rate, which could serve as a silver lining.
The implications stretch far beyond just smartphones. The United States is India’s single largest trading partner, accounting for 18% of total goods exports. A 26% tariff could hammer electronics shipments, undercut profitability, and unsettle supply chains just as India was gaining momentum.
As per a Doordarshan news report, Ashok Chandak, President of the Indian Electronics and Semiconductor Association (IESA), said the tariff regime poses a serious challenge. “The 26 per cent tariffs imposed by the US present a significant challenge to India’s exports... While India is better positioned than many other economies, these tariffs can potentially impact domestic industries, disrupt trade flows, and squeeze profit margins.”
Chandak also noted that India’s relatively low imports from the US could give it wiggle room to recalibrate and avoid a full-blown trade standoff.
Swaminathan Aiyar, economist, said that the Trump tariffs will force manufacturers to rethink their entire production and export strategies. “There will be all kinds of factories and places which can no longer export,” he said, citing Apple’s large manufacturing plant in India, which exports to the US, as an example.
Also Read: Recession, not Liberation Day! Swaminathan Aiyar sees India, US and world GDP slumping for Trump tariff 'insanity'
Apple’s tightrope between geopolitics and profit
Apple may be one of the first casualties of the new tariff regime. The Cupertino giant, which makes most of its iPhones in China, now faces a brutal 54% duty on Chinese imports. For Apple, that’s not just a financial hit — it’s an existential supply chain crisis.
Analysts at Rosenblatt Securities estimate that the high-end iPhone 16 Pro Max could shoot up to nearly $2,300 if Apple passes the added costs to consumers. That’s over ₹1.9 lakh in Indian terms.
Even its India-made devices won't be spared. India has quickly grown into Apple’s second-largest production base, accounting for 10–15% of iPhone assembly. Through manufacturers like Foxconn and Tata Electronics, Apple has benefited handsomely from India’s Production Linked Incentive (PLI) scheme. Yet now, exports from India will carry a 26% tariff burden.
Apple has not commented on the developments. But Apple’s stock plunged more than 8% following the announcement — its worst single-day drop since 2020. With declining iPhone sales and new AI features failing to excite customers, Apple may struggle to justify such steep price hikes.
And that’s not the only risk. “The tariffs clearly represent a significant risk to the global outlook at a time of sluggish growth,” warned IMF Managing Director Kristalina Georgieva. “We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty.”
Also Read: Trump’s tariff bombshell hits India, but some desi sectors dodge the shrapnel
How India’s iPhone factory strategy may unravel
There’s a flip side. Trump’s actions may ironically make India more attractive to multinationals looking to hedge against China. Apple has been steadily increasing its footprint in India, encouraged by government incentives and geopolitical shifts.
Apple already plans to shift up to 25% of iPhone production to India by 2025. The government is hoping to leverage this moment to fast-track a bilateral trade agreement (BTA) with the US.
“Support from corporations such as Apple, Microsoft and Google may be sought… to reinforce India's pitch during BTA negotiations with the Trump administration,” a senior industry official told The Times of India.
India’s massive smartphone export drive, led by Apple’s contract manufacturers — Foxconn, Tata and Pegatron — is also evidence of its rising capability. Between April and January, India exported nearly ₹1 lakh crore worth of iPhones, up from ₹60,000 crore in the same period last year. In January alone, iPhones made up 70% of total mobile phone exports.
Under the PLI scheme, the government has disbursed nearly ₹8,700 crore to boost electronics manufacturing, with Apple’s partners receiving over 75% of those subsidies.
The government’s ambition is clear: to make India a reliable electronics powerhouse, especially as US-China tensions simmer.
But the new tariffs threaten to undercut those gains. While India’s production for Apple remains at 10–15% of total volume, the company had aimed for 25% by 2025. That goal is now at risk.
Still, Apple may have no choice but to stick with India for now. China’s 54% tariff (34% new plus 20% existing) is simply too high to ignore, and Vietnam’s 46% rate isn’t much better. India remains the “least bad” option.
India's electronics industry is sounding the alarm. If the 26% US tariff on smartphones and related products from India remains unchanged, manufacturers might start looking elsewhere.
“There’s a real chance companies could begin shifting new manufacturing to countries with lower tariff exposure,” a senior industry official told TOI.
The concern is less about immediate disruption and more about strategic drift. “The shift to low-tariff countries may happen to absorb the impact of high production costs, which could stoke inflation and reduce demand in the US,” the official added.
Industry bodies have begun flagging the risks to policymakers, stressing that India can’t afford to lose ground just as it’s emerging as a credible alternative to China and Vietnam.
The Indian Cellular and Electronics Association (ICEA) pointed out that several developing economies are now offering more attractive trade terms. “Brazil, Turkey, Saudi Arabia, the UAE—all have secured far lower tariff rates compared to India, most at 10%. The Philippines sits at 17%,” the association noted.
Among these, Saudi Arabia and the UAE are seen as short-term threats due to their ambitious Special Economic Zones, leaner manufacturing setups, and potential labour cost benefits.
Even Brazil, traditionally seen as a tough trade partner, is gaining traction. “Its favourable treatment under recent US tariff actions adds strategic ambiguity and must be closely tracked,” ICEA said.
Also Read: Trump tariff on India back to 26% from 27% in revised White House document
China takes the heaviest blow
If India is caught in the crossfire, China is the bullseye. Trump’s administration has slapped a staggering 54% tariff on Chinese imports, combining a new 34% duty with a 20% legacy tariff. That affects not just iPhones but a range of consumer electronics.
The rationale, Trump said, is about fairness. “The tariffs give us great power to negotiate. Always have,” he told reporters. “I used it very well in the first administration… but now we’re taking it to a whole new level.”
U.S. Commerce Secretary Howard Lutnick and adviser Peter Navarro insisted the tariffs were permanent. Trump, ever unpredictable, hinted otherwise.
Markets weren’t convinced. The Dow dropped nearly 4%, the S&P 500 lost 5%, and the tech-heavy Nasdaq plunged nearly 6%, its worst showing since early 2020.
Also Read: Trump's tariffs hit China harder, but can India bask in the dragon's pain?
A pricey gamble for Apple — and consumers
Apple is staring down a brutal decision. Absorb billions in added costs, or pass them to consumers and risk losing market share.
The company has already committed $500 billion in US investments, opened an AI server facility in Texas, and relocated some supply chains. But the vast majority of its iPhones — around 90%, according to Evercore ISI — are still assembled in China.
With inflation worries already high and iPhone sales plateauing, the timing couldn’t be worse. Apple’s new AI-driven features haven’t sparked much consumer enthusiasm. Add a 40% price hike on top, and sales could slip even further.
Meanwhile, rivals like Samsung — with production based in countries facing lower tariffs — are likely to benefit. Consumers may begin to look elsewhere, even in traditionally loyal markets.
Whether Trump walks back the tariffs before their 9 April start date remains to be seen.
For India, the task ahead is delicate. With elections approaching, and its trade surplus with the US growing, Delhi must balance domestic industry goals with international diplomacy.
For now, the country may benefit from being “less hit” than others. But in the long game, nothing is guaranteed.
The global economy is once again entering uncharted territory — and India, like the rest of the world, is holding its breath.
(With inputs from Reuters, TOI)
A senior government source told The Indian Express that while there may be some short-term discomfort, there is hope that the trade agreement with the US could provide some relief. He also pointed out that, as far as Apple is concerned, most of its major production bases are in China, India, and Vietnam. Among them, India has received the lowest tariff rate, which could serve as a silver lining.
The implications stretch far beyond just smartphones. The United States is India’s single largest trading partner, accounting for 18% of total goods exports. A 26% tariff could hammer electronics shipments, undercut profitability, and unsettle supply chains just as India was gaining momentum.
As per a Doordarshan news report, Ashok Chandak, President of the Indian Electronics and Semiconductor Association (IESA), said the tariff regime poses a serious challenge. “The 26 per cent tariffs imposed by the US present a significant challenge to India’s exports... While India is better positioned than many other economies, these tariffs can potentially impact domestic industries, disrupt trade flows, and squeeze profit margins.”
Chandak also noted that India’s relatively low imports from the US could give it wiggle room to recalibrate and avoid a full-blown trade standoff.
Swaminathan Aiyar, economist, said that the Trump tariffs will force manufacturers to rethink their entire production and export strategies. “There will be all kinds of factories and places which can no longer export,” he said, citing Apple’s large manufacturing plant in India, which exports to the US, as an example.
Also Read: Recession, not Liberation Day! Swaminathan Aiyar sees India, US and world GDP slumping for Trump tariff 'insanity'
Apple’s tightrope between geopolitics and profit
Apple may be one of the first casualties of the new tariff regime. The Cupertino giant, which makes most of its iPhones in China, now faces a brutal 54% duty on Chinese imports. For Apple, that’s not just a financial hit — it’s an existential supply chain crisis.
Analysts at Rosenblatt Securities estimate that the high-end iPhone 16 Pro Max could shoot up to nearly $2,300 if Apple passes the added costs to consumers. That’s over ₹1.9 lakh in Indian terms.
Even its India-made devices won't be spared. India has quickly grown into Apple’s second-largest production base, accounting for 10–15% of iPhone assembly. Through manufacturers like Foxconn and Tata Electronics, Apple has benefited handsomely from India’s Production Linked Incentive (PLI) scheme. Yet now, exports from India will carry a 26% tariff burden.
Apple has not commented on the developments. But Apple’s stock plunged more than 8% following the announcement — its worst single-day drop since 2020. With declining iPhone sales and new AI features failing to excite customers, Apple may struggle to justify such steep price hikes.
And that’s not the only risk. “The tariffs clearly represent a significant risk to the global outlook at a time of sluggish growth,” warned IMF Managing Director Kristalina Georgieva. “We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty.”
Also Read: Trump’s tariff bombshell hits India, but some desi sectors dodge the shrapnel
How India’s iPhone factory strategy may unravel
There’s a flip side. Trump’s actions may ironically make India more attractive to multinationals looking to hedge against China. Apple has been steadily increasing its footprint in India, encouraged by government incentives and geopolitical shifts.
Apple already plans to shift up to 25% of iPhone production to India by 2025. The government is hoping to leverage this moment to fast-track a bilateral trade agreement (BTA) with the US.
“Support from corporations such as Apple, Microsoft and Google may be sought… to reinforce India's pitch during BTA negotiations with the Trump administration,” a senior industry official told The Times of India.
India’s massive smartphone export drive, led by Apple’s contract manufacturers — Foxconn, Tata and Pegatron — is also evidence of its rising capability. Between April and January, India exported nearly ₹1 lakh crore worth of iPhones, up from ₹60,000 crore in the same period last year. In January alone, iPhones made up 70% of total mobile phone exports.
Under the PLI scheme, the government has disbursed nearly ₹8,700 crore to boost electronics manufacturing, with Apple’s partners receiving over 75% of those subsidies.
The government’s ambition is clear: to make India a reliable electronics powerhouse, especially as US-China tensions simmer.
But the new tariffs threaten to undercut those gains. While India’s production for Apple remains at 10–15% of total volume, the company had aimed for 25% by 2025. That goal is now at risk.
Still, Apple may have no choice but to stick with India for now. China’s 54% tariff (34% new plus 20% existing) is simply too high to ignore, and Vietnam’s 46% rate isn’t much better. India remains the “least bad” option.
India's electronics industry is sounding the alarm. If the 26% US tariff on smartphones and related products from India remains unchanged, manufacturers might start looking elsewhere.
“There’s a real chance companies could begin shifting new manufacturing to countries with lower tariff exposure,” a senior industry official told TOI.
The concern is less about immediate disruption and more about strategic drift. “The shift to low-tariff countries may happen to absorb the impact of high production costs, which could stoke inflation and reduce demand in the US,” the official added.
Industry bodies have begun flagging the risks to policymakers, stressing that India can’t afford to lose ground just as it’s emerging as a credible alternative to China and Vietnam.
The Indian Cellular and Electronics Association (ICEA) pointed out that several developing economies are now offering more attractive trade terms. “Brazil, Turkey, Saudi Arabia, the UAE—all have secured far lower tariff rates compared to India, most at 10%. The Philippines sits at 17%,” the association noted.
Among these, Saudi Arabia and the UAE are seen as short-term threats due to their ambitious Special Economic Zones, leaner manufacturing setups, and potential labour cost benefits.
Even Brazil, traditionally seen as a tough trade partner, is gaining traction. “Its favourable treatment under recent US tariff actions adds strategic ambiguity and must be closely tracked,” ICEA said.
Also Read: Trump tariff on India back to 26% from 27% in revised White House document
China takes the heaviest blow
If India is caught in the crossfire, China is the bullseye. Trump’s administration has slapped a staggering 54% tariff on Chinese imports, combining a new 34% duty with a 20% legacy tariff. That affects not just iPhones but a range of consumer electronics.
The rationale, Trump said, is about fairness. “The tariffs give us great power to negotiate. Always have,” he told reporters. “I used it very well in the first administration… but now we’re taking it to a whole new level.”
U.S. Commerce Secretary Howard Lutnick and adviser Peter Navarro insisted the tariffs were permanent. Trump, ever unpredictable, hinted otherwise.
Markets weren’t convinced. The Dow dropped nearly 4%, the S&P 500 lost 5%, and the tech-heavy Nasdaq plunged nearly 6%, its worst showing since early 2020.
Also Read: Trump's tariffs hit China harder, but can India bask in the dragon's pain?
A pricey gamble for Apple — and consumers
Apple is staring down a brutal decision. Absorb billions in added costs, or pass them to consumers and risk losing market share.
The company has already committed $500 billion in US investments, opened an AI server facility in Texas, and relocated some supply chains. But the vast majority of its iPhones — around 90%, according to Evercore ISI — are still assembled in China.
With inflation worries already high and iPhone sales plateauing, the timing couldn’t be worse. Apple’s new AI-driven features haven’t sparked much consumer enthusiasm. Add a 40% price hike on top, and sales could slip even further.
Meanwhile, rivals like Samsung — with production based in countries facing lower tariffs — are likely to benefit. Consumers may begin to look elsewhere, even in traditionally loyal markets.
Whether Trump walks back the tariffs before their 9 April start date remains to be seen.
For India, the task ahead is delicate. With elections approaching, and its trade surplus with the US growing, Delhi must balance domestic industry goals with international diplomacy.
For now, the country may benefit from being “less hit” than others. But in the long game, nothing is guaranteed.
The global economy is once again entering uncharted territory — and India, like the rest of the world, is holding its breath.
(With inputs from Reuters, TOI)
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