In a highly accelerated pivot away from China, Apple is expected to source all of its iPhone to be sold in the US, from India, from as early as next year, reports Financial Times. This comes at a time when the US-China trade war is expected to boil up even further under President Trump, even though both sides have sounded out reconciliatory tones considering the collateral damage to their own economies. Nevertheless, the rhetoric remains high, prompting several US tech companies to look at alternate, non-China supply chains.
Apple sells nearly 60 million iPhones in the US annually, most of which now it plans to source from India as early as next year. This would be more than double the current capacity at its India production plants run by Foxconn and others. Apple spent heavily to develop its supply chains in China, and could do the same in India, though at a much more accelerated pace.
China and US have been locked in a trade war, ever since Donald Trump’s reciprocal tariffs announcement. China was levied with the most tariffs, with those increasing to as much as 125% after China hit the US with its own set of retaliatory tariffs. India, though mentioned several times as a ‘Tariff King’ by Trump, was still much lower, at 26%. Even those are suspended for 90 days, during which India looks prime to strike a trade deal with the US, even when others, including Korea and Japan, seem to be struggling.
More recently, Apple also rushed to export iPhones from India before Trump’s tariff announcements, to minimise damage. The company reportedly chartered over 1.5Mn devices to the US to be able to meet immediate demand as it planned out more long term solutions to tariffs.
It is key to note though, that iPhone assembly is the final part of rather arduously long production process. Several 100 components are brought together to stitch together the final device, most of which are still being manufactured in China. Apple assembling the iPhones in India would make India the exporting country, thus reducing the tariffs US will levy on these devices. Apple is reportedly working fast to switch even the production supply chain from China to other countries, including India.
