To avoid Trump’s China tariffs, Apple plans big push in India

Apple may intend to double iPhone production in India in the event the US puts tariffs on Chinese imports, raising production to 26% of global manufacturing within the next two years, local reports claim.

Building bigger in India

Any such move would add tens of thousands of jobs to Apple’s iPhone ecosystem in China, though there are some hurdles around

Right now, Apple makes around 12-14% of iPhones in India annually, and this was already expected to increase. Around 70% of iPhones made in India are exported to other markets, including the US.

Apple’s acceleration in building business in India is already widely known, but the move to increase manufacturing at this magnitude will add tens of thousands of jobs to Apple’s iPhone ecosystem in China, though there are some hurdles around cost and the need for some policy commitments, reporting claims. There are also challenges in such a rapid scaling up of manufacturing in terms of skills and experience. India has never operated manufacturing at this scale, a report claims.

Avoiding the Trump tax

However, the incoming US government has threatened to impose big tariffs on goods imported from China, and while this proved a vote-winner, it will be consumers who pay the fare.  Apple, of course, doesn’t want to dent its margins or its sales by sending prices too far North, so will inevitably seek ways to avoid tariffs, particularly as some of its competitors also have manufacturing bases outside China. The move may also help build US/India economic ties.

India may also benefit from building its electronics and computing industry as a result of the deal. Indeed, as the value of iPhones increases and demand for the higher value models grows, the value of devices made in India – now including premium models — will continue to increase. The scale of the manufacturing may also encourage other firms in the iPhone component supply space to invest in manufacturing in India, forming an infinite loop of economic growth in the nation. But the intensity of Apple’s investment also continues to expand Apple’s business in India, where the company grabbed 22% of India’s smartphone market in Q3, 24 and where it now intends opening four additional Apple retail stores.

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