According to a report, Apple is planning to source all its US-bound iPhones from India to avoid Trump’s tariff war with China. But has raises a serious question. Will it be a strategic retreat, or will it be a risky gamble for the trillion-dollar company?
Until now, Apple has been mostly reliant on China for manufacturing its products, including iPhones. However, the Trump tariff has been the worst nightmare for this technology giant. According to the recent tariff, the United States will impose a 150% tariff on anything imported from China. Since Apple’s 95% of the products are made in China, the tariff will hit the company hard, and will increase the product price significantly, if not sourced from a country where the Trump tariff is still low, such as India. Considering that Apple has recently decided to manufacture its products in India. But the question is, how feasible is that? It may not be feasible.
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It is A Reactionary Move, Not a Viable Solution
Apple’s decision is a very reactionary move, and our experts believe it is not a viable solution. Why? Well, because it appears less about long-term strategy and more about short-term survival in the face of Trump’s aggressive and destructive trade policies. Apple thrived from the beginning, depending on the unparalleled manufacturing ecosystem, and it is still almost fully reliant on China. But now it is more of a scrambled egg that is trying to avoid breaking due to the shake off. Possibly Apple products—made in China—will see a 104% increase in price for the American consumers.
Until now, the U.S. has not imposed the hefty tariff on Indian made products like it has on Chinese goods. Therefore, Apple’s diversifying production to India may mitigate some financial risks. But the main question that is threatening Apple’s decision is, can India’s infrastructure match China’s efficiency? India’s infrastructure is not as good as China’s because the Chinese supply chain relies on precision, scale, and speed, and it has been that way for decades. Not to mention that India has been growing fast, but it still struggles with bureaucratic delays, corruption, inconsistent power supply, and logistical bottlenecks. Thus, it raises a serious question: whether India will be able to live up to Apple’s standard and beat the Chinese supply chain.
Labor and Ethical Concerns Loom Large
Supply chain is not the only concern for Apple here. Labor and ethical concerns also loom large for producing its products in India. Apple already makes some of its products in India for sometimes and currently, its Indian suppliers—Foxconn and Tata—are ramping up their production facilities. But India has remained one of the major violators of labor rights, and it is going to be a problem for Apple as well.
Foxconn’s Chennai facility has extended work to Sundays to meet the growing demand. It is a move that could strain workers already facing tough conditions. Reported says that poor wages and worker protests at Indian iPhone factories suggest that Apple’s “China” exit may not be simple. Though the factories can overcome this with increased wages and better working conditions, in the Indian ecosystem, it won’t be that easy.
The Illusion of ‘Made in America’ is Just a Pep Talk?
Apple is moving out of China and shifting to India and other countries where the Trump tariff is not aggressive. But does that mean it is going to be “made in America “? It is not. But wasn’t that the main point of the Trump administration? It was, but it seems like it will just remain an illusion and a pep talk for the Trump administration until they consider India as part of America’s territory.
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Recently, the White House claimed that Apple gave the signal to invest $500 billion, which will return iPhone’s U.S production. But that was just another pep talk because analysts have already dismissed the idea. According to Wedbush Securities, if iPhone is produced in America, it will cost three times more than the current price. So, it doesn’t matter where the product is made, how much it cost matter the most for the American consumers. What do you think will happen if iPhone is made in America and sold for three times more than it was made in China? Apple’s sales will crash, and the company will lose a significant amount of its business overnight. However, Apple’s India extension might be feasible for Apple than the ‘Made in America” illusion of Donald Trump. This way, they can maintain the same business model and get their work done with the cheap labor in India. But is that safe? That remains a question until it is tested for sometimes.
A Fragmented Future for Apple’s Supply Chain
Shifting to India is not the complete solution for Apple. Its future is very fragmented with this supply chain. Moreover, Apple’s reliance on China won’t disappear overnight. You get to understand that over 90% of iPhones are still assembled there, along with 50% of Macs and 80% of iPads. So, even if India takes on US-bound iPhone production, China will remain the largest manufacturer of Apple products. It will remain an indispensable part of Apple’s supply Chain. This situation looks like a half-measure, and it looks very vulnerable for Apple. There is another tension as well: what if Trump increases tariffs on Indian goods as well, especially when India is also struggling with geopolitical games? Therefore, I think, Apple’s Apple’s India Shift is more of a Risky Gamble.
