Explained: Why Donald Trump’s Tariff Threats Could Make India Apple’s Next iPhone Factory Hub

India’s mobile phone manufacturing industry is seeing a massive shift, and much of the recent acceleration can be traced back to US President Donald Trump’s tariff threats. 

With Trump warning of a 25% tariff on imported iPhones unless Apple shifts production to the US, the tech giant is fast-tracking its "Made in India" plans to avoid supply chain disruption and cost escalation.

Trump Unhappy With Apple’s India Focus

In a bold message to Apple CEO Tim Cook, Trump said on Truth Social, "I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the US."

Analysts, however, warn that if Apple were to shift production to the US, the cost of high-end iPhones could exceed $3,000 — nearly triple the current price of around $1,119 — due to higher labour and operational expenses.

Apple Ramps Up Production in India

In response, Apple has intensified its India operations. Foxconn, one of Apple’s major suppliers, recently announced a massive Rs 12,800 crore ($1.48 billion) investment in its Tamil Nadu unit that manufactures iPhones. Apple has also begun shipping iPhones directly to the US via chartered cargo flights from India.

“Apple is positioning India as an alternative manufacturing base amid rising tariffs and supply chain concerns,” industry sources told Reuters.

In March 2025 alone, the company shipped 600 tons — or approximately 1.5 million iPhones — from India to the US, according to a Reuters report. This move aimed to preempt the tariff hike and maintain US inventory levels.

Also Read: Why iPhone Maker Foxconn Is Betting Big On India — and Why Is Donald Trump Unhappy About It?

India Beats China in iPhone Exports

According to a CNBC report citing new estimates from technology market research firm Canalys, now part of Omdia, in April 2025, iPhone shipments from India to the US jumped 76% year-on-year to 3 million units. During the same period, iPhone shipments from China plummeted 76% to just 900,000 units.

“The shift reflects not only the operational urgency to diversify beyond China but also a strategic response to tariff threats from the US and geopolitical frictions,”
said an Omdia analyst.

These insights are based on customs records and distribution channel data, underlining India’s growing role in the global electronics supply chain.

From 2 to 300 Plants

India's rise has been remarkable. In 2014, only 26% of phones sold in the country were made locally, and just two manufacturing plants were operational. Today, over 99% of mobile phones sold in India are made domestically, with more than 300 factories producing over 325 million phones annually.

“India has rapidly grown to become the second-largest mobile phone producer in the world,” experts told Reuters.

Exports have also soared — from virtually nothing in 2014 to Rs 1.29 lakh crore worth of phones shipped globally in 2023-24.

PMP and PLI Government Schemes

This transformation is strongly supported by government-led initiatives. The Phased Manufacturing Programme (PMP) and Production Linked Incentive (PLI) schemes have been instrumental in attracting investment and building domestic capacity.

The PLI scheme, launched in 2020, offers 3–6% incentives on incremental sales to eligible electronics manufacturers.

“As of February 2025, these schemes have generated over Rs 10,900 crore in investment and created more than 1.39 lakh direct jobs,” government officials confirmed.

India’s Electronics Industry Outlook

With supportive policies, a maturing semiconductor ecosystem, and growing investor interest, India’s electronics sector is on a high-growth trajectory. The country is projected to hit $300 billion in electronics production by 2026, with mobile phones forming a significant share.

In the face of global trade tensions and tariff wars, India is emerging as a critical player in the global supply chain, especially for tech giants like Apple looking to diversify beyond China.