Apple Inc. is set to make a strategic move to re-route the entire production of iPhones in the American market to India by 2026. The move comes against the backdrop of rising tariffs due to the ongoing U.S.-China trade war, which motivated the technology giant to balance rising costs by shifting its production operations. As quoted by various English media sources, this change accords with the long-term intention of Apple's plan to move beyond China on the supply side.
Apple Manufacturing Strategy Shifts Due to Tariffs
The escalating tensions in the United States-China trade war have predominantly affected Apple's global supply chain strategy. Since the high import duties imposed by China, Apple has been trying its best to relocate completely its production of iPhones in the US to India. Figures for recent periods indicate that an approximate 14% of the iPhones are currently manufactured in India, though China continues to host the lion's share at approximately 80%. Nonetheless, America's tariffs on Chinese imports amounting to apparently as much as 145%, the U.S. is driving the production located in China uneconomical to Apple.
This tariff gap has produced a massive price gap in the U.S. market between iPhones made in India and those produced in China. By concentrating production in India, Apple will be in a position to keep prices competitive in its largest market while closing its tariff exposure. The shift should be finished by 2026, and India will be the main production center for iPhones marketed in the United States.
India's Role Becomes Stronger in Apple's Global Value Chain
Apple's production in India started as the U.S.-China trade war grew during the time of former President Donald Trump. Meanwhile, India's government revealed a production-linked incentive (PLI) scheme to lure manufacturing of electronics. Following the trend, Apple has already started producing various models of its iPhones in India since 2020. Since then, it has stepped up gradually, incorporating more operations through local production partners and favorable government policies.
Apple produced iPhones worth $22 billion in India last year, of which $18 billion were destined for export markets. These numbers indicate India's increasing importance in Apple's global positioning. With more investment and development in infrastructure coming to the nation, Apple plans to make India its base hub to supply iPhones to America by 2026.
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