Apple Aims to Mitigate Tariffs by Shifting iPhone Manufacturing to India

Recent reports suggest that Apple is taking decisive action to avoid the significant tariffs imposed on Chinese imports by relocating its iPhone manufacturing operations to India. The tech giant has reportedly chartered cargo flights to transport around 600 tonnes of iPhones—equivalent to about 1.5 million handsets—from its Indian facilities to the United States since March. This strategic move comes as former President Donald Trump’s tariffs have heightened economic pressures on imports from both China and India.

Despite a temporary pause on a 26% tariff on Indian imports, imposed by Trump, the levies on Chinese goods are still extremely steep, reaching a staggering 145%. As Apple seeks to navigate this challenging landscape, the company is aiming to increase production at its Indian plants by 20%. To achieve this, Apple has ramped up staffing levels and extended operations at its primary Foxconn factory in Chennai to include Sundays.

As of last year, the Chennai plant was responsible for producing 20 million iPhones, including models from the latest iPhone 15 and 16 series. Analysts believe that if Apple successfully diverts production to the United States entirely, India-made iPhones could fulfil approximately 50% of American demand this year.

Industry experts have voiced concerns about a potential surge in iPhone prices as tariffs create additional cost pressures. A recent estimate by UBS indicates that the price of the iPhone 16 Pro Max—with 256GB storage—could skyrocket from $1,199 to nearly $2,000 if Apple passes along substantial tariff costs to consumers. The implications of shifting manufacturing back to the US are daunting, with experts estimating that a domestically produced iPhone could escalate to as much as $3,500.

The complex balance of manufacturing costs, tariffs, and consumer pricing continues to challenge Apple while it navigates an unpredictable global economic landscape. It remains to be seen how effectively the tech giant can leverage its Indian manufacturing capabilities in the short term while also seeking exemptions from tariffs on Chinese imports.