Will geopolitics derail Apple’s India bet or fuel a new era of global supply chain diversification
Apple Inc. is intensifying its manufacturing operations in India, aiming to reduce reliance on China and mitigate geopolitical risks. However, recent remarks by U.S. President Donald Trump opposing this expansion have introduced potential challenges to Apple’s strategic plans.
Apple’s Strategic Shift to India
Apple has been steadily increasing its manufacturing footprint in India. In the fiscal year ending March 2025, the company assembled approximately $22 billion worth of iPhones in the country, marking a 60% increase from the previous year. This growth is facilitated by partnerships with firms like Foxconn, Tata, and Pegatron, which have established significant production facilities across India. Notably, Foxconn’s new plant in southern India is expected to create up to 50,000 jobs at full capacity.
The shift to India is part of Apple’s broader strategy to diversify its supply chain amid escalating U.S.-China trade tensions. By 2026, Apple aims to source all iPhones sold in the U.S. from Indian manufacturing units, reducing exposure to Chinese tariffs and potential supply disruptions.
Trump’s Opposition to Apple’s India Expansion
During a recent speech in Qatar, President Trump expressed disapproval of Apple’s increasing manufacturing activities in India. He stated that he had a “little problem” with Apple CEO Tim Cook over the company’s decision to expand production in India, urging Apple to prioritize domestic manufacturing in the United States. Trump emphasized that India should manage its own industrial growth and reiterated concerns over India’s high tariff barriers, which he believes hinder American companies.
Trump’s comments come despite Apple’s commitment to invest $500 billion in the U.S. over the next four years, including plans to build new facilities and create jobs domestically. However, replicating Apple’s complex Chinese supply chain in the U.S. remains costly and logistically challenging.
Economic Implications of Shifting Production
Industry experts have highlighted the economic challenges of relocating iPhone production to the U.S. Manufacturing iPhones domestically could significantly increase production costs, potentially leading to higher consumer prices. Analysts estimate that producing iPhones in the U.S. could cost up to $3,000 per unit, compared to the current cost of around $1,000 when manufactured in India.
Additionally, India’s government has offered incentives to attract foreign manufacturers, including tariff reductions and infrastructure support. These measures have made India an increasingly attractive destination for companies like Apple seeking to diversify their manufacturing bases.
Apple’s Response and Future Outlook
Despite President Trump’s remarks, Apple has reaffirmed its commitment to expanding manufacturing operations in India. The company has assured Indian officials that its investment plans remain unchanged, viewing India as a major manufacturing base moving forward. Apple’s executives have emphasized the strategic importance of India in the company’s global supply chain, citing the country’s skilled workforce and favorable business environment.
As Apple continues to navigate the complexities of global trade dynamics, its expansion in India represents a significant step toward supply chain diversification. While political pressures may influence corporate strategies, economic considerations and long-term planning are likely to guide Apple’s decisions in the evolving global manufacturing landscape.
