The United States may soon impose a 25 percent tariff on iPhones that are assembled outside of the country, including those made in India. This announcement came from former US President Donald Trump during a recent global event. If the plan is put into action, it could lead to higher iPhone prices for US consumers.
Despite this tariff threat, experts believe that Apple will still save money by keeping iPhone production in India. A report by the Global Trade Research Initiative (GTRI) shows that India offers major cost benefits, even with added tariffs.
One key reason is labor costs. In India, assembly workers are paid about 230 dollars per month. In the United States, especially in California, that number can reach 2,900 dollars. The difference is more than ten times. Because of this, the cost to assemble one iPhone in India is only about 30 dollars. If Apple were to make the same phone in the US, that cost would jump to 390 dollars per unit.
The GTRI report also points out that India provides extra support to Apple through its Production Linked Incentive (PLI) scheme. This government-backed program offers financial benefits to companies that build products in India. Apple has been one of the biggest beneficiaries of this initiative.
At the Doha Summit, Trump reportedly told Apple CEO Tim Cook that he was not in favor of Apple expanding production in India. He wants more US companies to bring their manufacturing back home to create jobs in the United States. This is part of a wider policy approach focused on economic nationalism. However, Apple continues to grow its presence in India. The company has opened Apple stores and expanded its assembly units across the country. India’s growing tech talent, lower labor costs, and business-friendly environment make it an attractive location for Apple’s long-term strategy.
If Apple does shift iPhone production back to the United States, the company could face a major drop in profit per device. At present, Apple earns about 450 dollars on each iPhone sold. If the production moves to the US, this profit could fall to just 60 dollars unless the company raises prices. A large price increase could push customers to consider cheaper alternatives, affecting Apple’s market share.
The GTRI report gives a breakdown of how profits are distributed when an iPhone is sold. Apple keeps the largest share, about 450 dollars. Taiwan earns 150 dollars for producing the chips, while South Korea earns 90 dollars for memory and OLED components. India or China, which assemble the phone, earn just 30 dollars. That’s less than 3 percent of the retail price.
Apple’s manufacturing in India supports nearly 60,000 jobs. Most of these are in the southern part of the country, where tech and electronics plants are growing quickly. These jobs are important for both the local economy and the Indian government’s plan to boost its position in global manufacturing.
The plan to add a 25 percent tariff on India-assembled iPhones is part of a larger effort by the United States to reduce its dependence on foreign manufacturing. This trend is becoming common in many countries. Governments are trying to build strong local industries and reduce global risks. But global supply chains are deeply connected. Apple relies on a worldwide network of suppliers and workers. Disruptions to this system could result in delays, higher costs, and fewer choices for consumers.
It is not yet clear if Apple will increase iPhone prices in the US to cover the extra cost of tariffs. The company may choose to absorb some of the cost or pass it fully to the buyers. In either case, the result could impact sales, especially among price-sensitive customers.
At the moment, Apple has not made an official comment about the tariff threat. Analysts believe the company will closely monitor the situation and respond based on how US policies change. Any decision to shift production would take time and major investment.
The future of iPhone production could depend on upcoming trade talks, US election results, and changes in global demand. For now, India remains a key player in Apple’s supply chain, offering low costs and strong local support.
