Trump Tells Apple to Stop Building iPhones in India: What It Means for Apple, India, and U.S. Trade

On May 15, 2025, U.S. President Donald Trump made headlines during a state visit to Qatar by urging Apple CEO Tim Cook to halt the company’s expanding manufacturing operations in India and shift iPhone production back to the United States. Trump’s directive, part of his broader “America First” trade policy, aims to boost domestic manufacturing and address high tariff barriers in countries like India. This move has sparked intense debate about its implications for Apple’s global supply chain, India’s ambitions as a manufacturing hub, and U.S.-India trade relations. This article explores the background, potential impacts, and broader consequences of Trump’s statement.

Background: Apple’s Manufacturing Shift to India

Apple’s manufacturing strategy has undergone significant changes in recent years, driven by geopolitical tensions, trade policies, and the need to diversify its supply chain. For nearly two decades, China was the epicenter of iPhone production, with over 80% of Apple’s products assembled there. However, U.S.-China trade tensions, exacerbated by tariffs as high as 145% on Chinese imports, prompted Apple to reduce its reliance on China. India emerged as a key alternative, offering lower tariffs (26% before a 90-day pause in April 2025) and a supportive government under Prime Minister Narendra Modi, which has provided production-linked incentives and proposed $2.7 billion in subsidies for electronics manufacturing.

In the fiscal year ending March 2025, Apple assembled $22 billion worth of iPhones in India, a 60% increase from the previous year. Foxconn, Tata Electronics, and Pegatron operate three factories in southern India, with two more under construction. In March 2025 alone, Apple exported nearly $2 billion worth of iPhones to the U.S., accounting for 97.6% of its Indian production. The company has reportedly planned to source all U.S.-bound iPhones from India by 2026, doubling its current output to over 60 million units annually. To preempt tariff hikes, Apple airlifted 600 tons of iPhones (approximately 1.5 million devices) to the U.S. in March 2025, using at least six cargo jets.

Trump’s Directive: Context and Motivation

Trump’s call to halt Apple’s Indian expansion aligns with his long-standing goal of repatriating manufacturing to the U.S. During his first term, he pressured Apple to produce iPhones domestically, though exemptions for smartphones softened the impact. In 2025, Trump reiterated this stance, criticizing India’s high tariff barriers, which he described as among the world’s highest, making it difficult to sell American products in India. He claimed India offered to drop tariffs on U.S. goods in ongoing trade negotiations, though details remain unclear.

Trump’s conversation with Cook, as reported by Bloomberg, included pointed remarks: “We are not interested in you building in India. India can take care of themselves.” He suggested that Apple would “up its production in the United States” following their discussion. The White House has cited Apple’s $500 billion investment commitment over the next four years, which includes servers for AI products, Apple TV productions, and 20,000 R&D jobs, as evidence of the company’s confidence in U.S. manufacturing. However, analysts note this investment does not explicitly include iPhone production.

Implications for Apple

Supply Chain Disruption

Apple’s pivot to India was a strategic response to U.S.-China trade tensions and the risks of over-reliance on a single manufacturing hub. Moving production to the U.S., as Trump demands, would disrupt this carefully calibrated strategy. Building new U.S. plants could take years and cost billions, given the complex supply chain Apple developed in Asia over decades. While India and Vietnam (which produces iPads and Apple Watches) face lower tariffs than China, U.S. production would likely increase costs due to higher labor wages and infrastructure expenses.

Cost and Pricing Pressures

Analysts estimate that an iPhone assembled in the U.S. could cost $3,500, compared to $1,008 in India or $938 in China for a $1,000 retail model. Such a price hike could erode Apple’s competitive edge in the U.S., its largest market, which accounted for 28% of global iPhone shipments in 2024. Even with tariffs, Apple has some flexibility to absorb costs, thanks to its high-margin services division, which generated $96 billion in revenue last year. However, prolonged tariffs or a forced U.S. shift could force Apple to raise prices, potentially dampening demand.

Strategic Realignment

Apple CEO Tim Cook, known as a “supply chain whisperer,” has navigated trade wars before. In 2025, Apple mitigated tariff impacts by ramping up Indian production and stockpiling inventory in the U.S. Cook’s recent earnings call emphasized diversification, stating, “Having everything in one location had too much risk.” Trump’s directive may push Apple to explore smaller-scale U.S. production (e.g., HomePods or AirTags) to secure tariff exemptions, but a full iPhone shift remains unlikely before 2028, according to Wedbush Securities analyst Dan Ives.

Implications for India

Setback for “Make in India”

India’s ambition to become a global manufacturing hub, championed by the “Make in India” initiative, relies heavily on Apple’s presence. The company’s $22 billion iPhone production in FY24 contributed to exports of nearly ₹1 lakh crore ($12 billion) between April and January 2025. Trump’s pressure threatens this momentum, as Apple’s potential retreat could deter other multinationals eyeing India as a China alternative. The Indian Electronics and Semiconductor Association has warned that U.S. tariffs, even at 26%, could disrupt trade flows and squeeze profit margins.

Economic and Employment Impacts

Apple’s Indian operations, primarily in Tamil Nadu and Karnataka, employ thousands directly and indirectly through suppliers like Foxconn and Tata. Foxconn’s Chennai plant, which produced 20 million iPhones in 2024, recently extended operations to Sundays to meet demand. A slowdown in Apple’s expansion could limit job creation and economic growth, particularly in southern India, where new factories are being built.

Trade Negotiations

Trump’s claim that India offered “zero tariffs” suggests ongoing bilateral trade agreement (BTA) talks could mitigate some pressures. India may leverage support from tech giants like Apple, Microsoft, and Google to strengthen its position in negotiations. However, India’s high tariffs on U.S. goods remain a sticking point, and any concessions could reshape its trade strategy.

Implications for U.S.-India Trade

Tariff Tensions

U.S.-India trade relations have been strained by reciprocal tariffs. The U.S. imposed a 26% tariff on Indian electronics in April 2025 (paused for 90 days), while India’s tariffs on U.S. goods average 13.5%. Trump’s rhetoric underscores his frustration with India’s trade barriers, but his acknowledgment of India’s tariff reduction offer signals potential for compromise. A successful BTA could lower tariffs and boost trade, but failure to reach an agreement may escalate tensions.

Broader Trade War Dynamics

Trump’s tariffs, targeting over 180 countries, aim to remake global trade by prioritizing U.S. manufacturing. While smartphones are currently exempt from the steepest tariffs, this could change, affecting Apple and other tech firms. India’s relatively lower tariffs compared to China (145%) and Vietnam (46%) give it an edge, but Trump’s push for domestic production could reduce India’s role as an export hub for U.S.-bound goods.

Economic Impacts

For the U.S., bringing iPhone production home could create jobs but risks higher consumer prices and reduced competitiveness for Apple. For India, maintaining its manufacturing appeal is critical to attracting foreign investment and sustaining export growth. The interplay of these dynamics will shape U.S.-India trade ties in the coming years.

Challenges and Uncertainties

Supply Chain Complexity

Even if Apple shifts assembly to the U.S., its reliance on Chinese components (e.g., processors, screens) means tariffs on parts could still inflate costs. Moving the entire supply chain, as some analysts suggest, could take decades and is considered “nearly impossible” by Bank of America analyst Wamsi Mohan.

Political and Policy Risks

Trump’s tariff policies are fluid, with exemptions and pauses creating uncertainty. His administration’s willingness to negotiate with India and China could alter the landscape, but political posturing may delay concrete outcomes. Apple’s earnings call on May 1, 2025, is expected to shed light on its tariff strategy and India’s long-term role.

Consumer Behavior

U.S. consumers, wary of price hikes, rushed to buy iPhones in early 2025, boosting Apple’s Q1 shipments by 10% to 57.9 million units. Sustained tariffs or U.S. production could shift demand, especially if competitors like Samsung, with more diversified supply chains, maintain lower prices.

Conclusion

Trump’s directive to stop Apple’s iPhone production in India is a bold move with far-reaching implications. For Apple, it threatens a carefully orchestrated supply chain diversification strategy, potentially raising costs and prices. For India, it jeopardizes ambitions to become a global manufacturing powerhouse, with economic and employment stakes. For U.S.-India trade, it highlights tensions over tariffs but also opens the door to negotiations. While Apple’s immediate response remains unclear, Tim Cook’s track record suggests a pragmatic approach, balancing compliance with global realities. As trade policies evolve, the tech giant’s next steps will shape not only its future but also the broader landscape of global manufacturing and U.S.-India relations.

Sources:

Bloomberg, “Trump Wants Apple to Stop Moving iPhone Production to India”
Reuters, “Apple airlifts 600 tons of iPhones from India ‘to beat’ Trump tariffs”
The Economic Times, “Trump wants Apple to stop moving iPhone production to India”
The Guardian, “Apple ‘aims to source all US iPhones from India’”
Times of India, “Apple’s China exodus: All US iPhones to be made in India by 2025”
Posts on X reflecting sentiment on Trump’s statement

Trump Tells Apple to Stop Building iPhones in India: What It Means for Apple, India, and U.S. Trade

Background: Apple’s Manufacturing Shift to India

Trump’s Directive: Context and Motivation