Apple Reroutes iPhone Production from China to India Amid Trade War

Apple’s Strategic Realignment

Amid intensifying trade tensions between the United States and China, Apple is reportedly accelerating plans to shift its iPhone assembly for the U.S. market entirely to India. According to an ET report, this move is seen as a direct response to the recent tariff hikes, including a 145% U.S. import duty on Chinese electronics and China’s retaliatory 125% levy on American goods. With India subject to a relatively lighter 26% tariff, it has quickly emerged as Apple’s most viable alternative for manufacturing continuity.

This shift is not merely reactive—it’s a calculated play in Apple’s ongoing effort to diversify its supply chain and reduce dependence on China. With plans in motion to manufacture over 60 million iPhones annually for the U.S. market from Indian facilities by 2026, Apple appears to be reimagining its global production model.

Tariff Turbulence and the Trigger for Change

The tariff battle between the U.S. and China has disrupted long-standing trade routes and forced global companies to rethink supply chain strategies. For Apple, the stakes are particularly high. In 2024 alone, the U.S. accounted for 28% of Apple’s global iPhone shipments—roughly 65 million units out of 232.1 million, according to IDC.

Although Washington temporarily paused some tariffs on smartphones, a blanket 20% import tax on Chinese products remains. In response, Apple began airlifting iPhones made in India to the U.S., circumventing these financial roadblocks. The success of this effort signaled a readiness to scale Indian operations even further.

India’s Rising Role: Foxconn and Tata Lead the Charge

India’s emergence as a key manufacturing hub for Apple is underpinned by two major players—Foxconn and Tata Electronics. As of March, Foxconn alone exported $1.31 billion worth of smartphones in a single month, surpassing its combined figures for January and February. Tata Electronics also saw a massive 63% month-over-month jump in iPhone exports, reaching $612 million.

While final assembly takes place in India, many components still come from Chinese suppliers. Nevertheless, India’s role is evolving from a peripheral assembler to a cornerstone of Apple’s global production network.

iPhone 16e and 17e: Made in India, for the World

In parallel with its manufacturing pivot, Apple has also expanded its product lineup with the launch of the iPhone 16e in India. Priced at Rs 59,900—about Rs 20,000 less than the standard iPhone 16—it introduces budget-friendly innovation with features like a 48MP camera, a C1 modem, and Apple Intelligence integration.

Apple replaced its SE line with the new ‘e’ series this year, and the iPhone 17e is already in trial production. Tipsters on Weibo have hinted at a possible May 2025 launch, with expectations of hardware upgrades including a dynamic island display and improved battery life. The iPhone 17e could be the model that cements India’s role as both a production and innovation hub.

Viewpoint: Why Apple’s India Bet Makes Strategic Sense

From a geopolitical and economic lens, Apple’s India move is more than a contingency plan—it’s a strategic hedge. India offers a large skilled labor force, growing infrastructure, and political alignment with Western democracies. With incentives under the Production Linked Incentive  scheme, Apple’s cost-benefit balance favors deeper investment.

However, challenges remain. India still lacks the scale and maturity of China’s manufacturing ecosystem, particularly in component fabrication. Apple’s long-term success will depend on its ability to localize more of its supply chain, build ancillary industries, and maintain quality at scale.

A New Chapter in Global Tech Manufacturing

Apple’s decision to shift iPhone assembly for the U.S. market to India signals a transformative moment—not just for the company, but for global manufacturing at large. As geopolitical fault lines redraw trade maps, India stands at the forefront of a new era in electronics production.

While Apple’s journey to full-scale Indian manufacturing will be complex, the company has taken a bold first step. In a world where economic resilience is as important as innovation, Apple is proving that the future of tech might just be written in Bengaluru, not Beijing.

(With inputs from agencies)