From ‘Made in China’ to ‘Made in India’. Apple’s plan is to migrate all the production of the iPhone that are sold in the US so that everyone comes from India. It is the less bad solution to the problem that tariffs pose, and that suddenly make the gigantic investment that Apple has made in China in time, money and resources is greatly impacted.
India will manufacture all iPhone sold in the US. As indicated in Financial Times, Apple hopes to migrate all the iPhone assembly that are sold in the United States to India. These measures follow the line of diversification of the production and assembly that Apple already had been executing for a long time, but they accelerate it remarkably for a single reason: the entry into force of the tariffs announced by Donald Trump. As highlighted in FT, the assembly is the last step of the production of the iPhone, which needs hundreds of components in which Apple is still very dependent on Chinese suppliers. India can thus take a step to take the witness of China as “factory of the world.”
Objective date: 2026. Sources close to Apple’s plans point out that the goal is to ensure that all iPhone sold in the US are assembled in India before the end of 2026. Apple sells around 60 million iPhone in the US every year, and that objective will force India to double the current production within that period.
How much migration will cost. This logistics transfer involves a massive investment in infrastructure, personnel training and adaptation of supplier and distribution chains. Apple has already managed to move part of the production, and in the 12 months that ended in March Apple assembled iPhone worth 22,000 million dollars in India, 60% more than the previous year.
Foxconn and Tata prepare new factories in India. The vast majority of iPhone assembled in India are produced in the Foxconn factory to southern India, in the state of Tamil Nadu. Another suppliers is Pequeatron, which belongs to the Tata Group and that bought Wistron’s local business in that country, a plant with 10,000 employees. Bloomberg already indicated in the late 2023 how Tata prepared a new plant in Tamil Nadu with 20 assembly lines and up to 50,000 employees. It was then expected that the factory was operational during the second semester of 2025.
But he would lose. The cost of production and export to the US from India is lower than tariffs in China would mean. However, it is still superior to that of a chain that was already outraopartimized in the Asian giant. Perhaps a new tariff agreement with China raises changes in those plans. In addition Trump already warned that he could apply specific exemptions to certain companies, and Apple is one of the candidates.
At the moment there are no tariffs. The Trump administration announced a few days ago that various electronic products, including smartphones and computers, would be exempt from reciprocal tariffs, something that gives a break to companies like Apple. These exemptions do not apply to additional 20% taxes that were applied to China to press Beijing for illegal fentanyl traffic.
Loss of human capital. China has been the epicenter of Apple industrial production for two decades. There a highly specialized workforce and hypeopimized processes have been created, and migration to factories in India makes part of that human capital that is hardly replicable in the short term in India.
Rotations China-India prohibited. Foxconn recently stopped offering Rotations from China workers to India, as indicated in Rest of the World, something that can have a clear impact on the production lines of their plants in Tamil Nadu or Karnataka … and in Apple’s plans. Those Chinese professionals supervised the production of iPhone in the plants of India. Some of those employees of continental China will be replaced by those of Taiwan, who do have permission for those rotations.
What about Apple’s investment in China. In the last two decades Apple has invested billions of dollars in China to optimize its iPhone production lines there. In fact, Zhengzhou, in the province of Henan, is popularly known as “the city of the iPhone” because there is the most important Foxconn production plant for these mobiles. Apple generated millions of works in China directly or indirectly, and this new focus on India will make the structure change.
But China is still crucial. Tariffs impact US imports from China, and that is where the role of India will be relevant. However, China will remain critical for Apple’s global operation, especially in the short term. The Cupertino company is making an important investment to diversify all this production and distribution chain. China may no longer manufacture the iPhone that are sold in the US, but will manufacture those that are sold in many other parts of the world. China’s role does not disappear: it is only being rebalancing.
Image | Apple | Naveed Ahmed
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