Donald Trump Wants iPhones Made in USA, What Happens to India's iPhone fans if Apple Backs Off?

Picture this: you head to the store to purchase the next iPhone, but it is not available. Or worse still, it costs much more than before. That could become a reality if Apple packs up its belongings and exits India.

Why? Because the US President Donald Trump desires iPhones only made in America. He's threatening 25% tariffs on Apple if it continues producing phones in India. Trump's message is clear and loud: "No more Made in India iPhones." 

What Happens to India’s iPhone Manufacturing Hub Position?

In the past few years, India has become Apple's go-to destination for building iPhones. Chennai and Bengaluru are abuzz with Apple facilities operated by Foxconn, Pegatron, and Wistron. The company is planning to further expand its presence in these cities with new facilities. These facilities export iPhones to the US, China, and the rest of the globe. Apple also has its research, design, and testing facilities in India. If Trump makes Apple relocate everything to America, here is what you may be up against:

1. Hello to Higher Prices

Manufacturing phones in America is much more costly than in India. If Apple relocates its manufacturing to America, do not be shocked if the next iPhone is Rs 20,000 or Rs 30,000 pricier. The iPhone that cost Rs 79,000 earlier could become Rs 1 lakh or higher.

2. Fewer Jobs, Sluggish Growth

More than 1 lakh Indians are employed directly and around 300,000 indirectly by Apple's supply chain. If Apple withdraws, all those jobs would disappear. That is a massive setback not only for employees, but also for India's aspiration of emerging as a manufacturing hub for the tech industry.

3. Short Supply, Delayed Waiting

Remember that pandemic-era chip shortage delays? This has the potential to be even worse. With fewer manufacturing plants, Apple may not be able to keep up with demand. That results in lengthy wait times or even models not being available in India at all.

4. The End of "Made in India" iPhones

Apple recently began selling India-produced iPhones in India and worldwide. It was a source of pride. If Apple departs, that journey is shortened and India reverts to being only a market, not a maker.

Reality Check

Analysts predict that relocating Apple's enormous supply chain back to the US is nearly impossible. India offers a massive pool of skilled workforce at relatively lower cost. Apple also benefits from government incentives through Production-Linked Incentive (PLI) scheme. While all this holds true, Apple may have little option if Trump prevails and adheres to his strategy.  So, the next time you're holding an iPhone, remember where it has made matters more than you think. And if Apple actually exits India, it's not just a factory concern - it's your wallet, your wait, and your next upgrade on the line. 

Read more: Trump's Ultimatum to Tim Cook: Only iPhones Built in the US Can Be Sold Here- Full Story in 5 Points