Apple to Abandon China for India as Tariffs Bite

Apple is planning to move iPhone production for the United States market from China to India by 2026 in an effort to avoid the rising tariffs caused by the trade confrontation initiated by former US President Donald Trump. The company intends to manufacture more than 60 million iPhones annually for the United States in India, according to a report by the Financial Times.

Sources reveal that this decision is part of Apple’s wider strategy to diversify its supply chain but that the move is now happening much faster than investors had anticipated. The target is to complete this transition by the end of 2026, which will result in a doubling of Apple’s production in India compared to its previous levels. Apple, valued at £2.4 trillion ($3 trillion), will need to significantly expand its capacity in India to meet the demands of the American market.

Currently, Apple manufactures most of its iPhones in China through partners like Foxconn. However, the introduction of harsh export duties under Trump’s trade policies severely affected Apple’s operations. Trump’s announcement of drastic tariff increases led to a fall of £560 billion ($700 billion) in Apple’s market value, prompting the company to expedite the shipment of Indian-made iPhones to the United States to sidestep the heavy tariffs.

Despite the expansion in India, a significant portion of iPhone assembly still relies on components sourced from China, indicating continued supply chain dependency. Contract manufacturers such as Tata Electronics and Foxconn have been scaling up operations in India, but final assembly remains a complex process.

Trump initially imposed a 100% increase in tariffs on Chinese imports, later offering a short-term reprieve for smartphones. Yet, smartphones remain subject to a specific 20% tariff. India, in turn, faced a 26% tariff under the so-called “mutual” trade war tariffs, although this was temporarily paused as India negotiated a bilateral trade agreement with Washington. During a recent visit to India, US Vice President Jay Dee Vance confirmed that talks on trade regulation were making “very good progress.”

In 2024, the United States accounted for about 28% of Apple’s 232.1 million global iPhone shipments, showing the strategic importance of the American market.

Meanwhile, China is now considering suspending 125% tariffs on some US goods such as medical equipment, chemicals and aircraft leases to ease economic damage from the ongoing trade conflict.