Most recently, the President of the United States, Donald Trump, said he has asked Apple to halt its manufacturing expansion in India. Instead, Trump wants Cook to increase production in the United States to meet the region’s demand.
What Did Trump Say And How Is It Important For The United States Economy?
“Tim look, we treated you really good, we put up with all the plants that you build in China for years, now you got build us. We’re not interested in you building in India, India can take care of themselves … we want you to build here,” Trump said in a statement to the media.
- Now, Trump’s statement about urging Apple to increase local production aligns with his broader economic and political visions.
- By discouraging Apple from investing more in India and boosting its production in the United States, Trump wants to boost domestic employment and economic growth.
- It will also help the company and the country reduce their dependence on foreign supply chains for domestic consumption in the long run.
- India’s trade surplus of $45 billion with the United States could also be a reason behind Trump’s remarks.
While Apple’s shift to India came at a time of trade uncertainties between America and China (and the entire tariff saga that temporarily ended with a 90-day pause), it looks like the U.S. administration is signalling Apple not to overlook the local manufacturing possibilities instead of doubling down on foreign manufacturing ecosystems, reminding it about its initial commitment.
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Apple’s Commitment To The United States Remains Intact
It is important to point out that in February 2025, Apple had already committed to invest more than $500 billion in the United States over the next four years.
The company announced its plans via a press release, mentioning that the “$500 billion commitment includes Apple’s work with thousands of suppliers across all 50 states, direct employment, Apple Intelligence infrastructure and data centers, corporate facilities, and Apple TV+ production in 20 states.”
India’s Role In Apple’s Global Supply Chain
- In FY2025, Apple produced iPhones worth $22 billion in India, which is 60% higher than FY24.
- Out of that, Apple exported iPhones worth $17.4 billion out of India (75% YoY increase).
It is the Taiwanese firm Foxconn and the Indian conglomerate’s consumer electronics division, Tata Electronics, that’re handling the assembly lines.
India’s iPhone facilities reportedly produced over 40 million iPhone units annually, about 20% of the company’s global output. In fact, while announcing Apple’s latest quarterly earnings results, Cook mentioned how the majority of iPhones sold in the United States will “have India as their country of origin.”
India isn’t just emerging as the company’s manufacturing hub, but it is also one of the fastest-growing retail markets for the company.
- Between January and March 2025, Apple sold over three million iPhones in the country (25% YoY growth) despite the entire smartphone shipments falling by 6% in the quarter.
- The rise in iPhone shipments helped the company capture its highest Indian smartphone market share ever at 9.5%. During that period, the baseline iPhone 16 (which costs around Rs. 70,000) emerged as the most popular iPhone in India.
- Industry experts have warned that manufacturing iPhones in the United States could increase their cost to around $3,000, which is thrice that of the current average price of around $1,000.
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Apple’s Statement On Manufacturing In India And Its Future
A while after Trump’s remarks, the government of India has stated that Apple’s investment and manufacturing plans for the country remain on track, and there’s no immediate change in production strategy despite the President’s remarks.
- However, according to a recent Times of India report, Apple is awaiting clarity on the geopolitical situation and, for the time being, is considering putting a pause on aggressive production expansion plans in India.
- The founder of the Flobal Trade Research Initiative (GTRI) has mentioned to the Economic Times that India earns around $30 for every iPhone manufactured in the country, as it is only the final assembly that takes place in the country.
If Apple considers relocating the facilities, the country will push toward advanced manufacturing in display technologies, batteries, and semiconductors.
While the situation between President Trump and Apple remains unclear, other smartphone manufacturers like Samsung and Google are considering moving some portion of their production to India. While Samsung is in early-stage discussions with Bhagwati Products (Micromax) and Dixon Technologies, Google is also in talks with local partners like Foxconn to evaluate the situation.
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