Trump’s 25% Tariff Announcement: Apple’s ‘Make in India’ Strategy at Risk, What It Means for India’s Exports
Newly elected U.S. President Donald Trump has once again emphasized his “Make in America” policy by targeting Apple. He announced that a 25% import tariff will be levied on iPhones manufactured in India or any other country. This move could be a major blow to India’s “Make in India” initiative, which has been a foundation for Apple’s increasing investments and production in the country in recent years. In this article, we analyze Trump’s decision, its impact on India, and the future of the “Make in India” program.
Trump’s Warning: “Make iPhones in America or Pay the Price”
Trump posted on his social media platform, Truth Social: “I already told Apple CEO Tim Cook that iPhones sold in America must be made in America. If they’re made in India or elsewhere, Apple will face a 25% tariff.” This aligns with his broader “Make in America” agenda aimed at boosting domestic manufacturing and job creation.
Speaking recently at a business event in Qatar, Trump said he directly discussed the issue with Tim Cook. “Tim is a good friend. I’ve done a lot for him. You’re investing $500 billion in America, but now I hear you’re building factories in India. I don’t like that. India can take care of itself.”
This statement comes at a time when Apple has significantly ramped up production in India as part of its ‘Make in India’ strategy. This approach has positioned India as a major hub in the global supply chain.
‘Make in India’: Apple’s Expanding Presence in India
“Make in India” is a flagship initiative by the Indian government to promote domestic manufacturing and attract global investment. Apple has significantly benefited from this program, partnering with companies like Foxconn, Tata Electronics, and Pegatron to assemble iPhones in India.
In the fiscal year ending March 2025, iPhone production in India reached $22 billion, a 60% increase over the previous year. Currently, about 15–20% of all iPhones sold worldwide are made in India, with Apple aiming to raise this to 25% in the coming years. New manufacturing units have been set up in Chennai, Bengaluru, and other southern cities.
The Indian government’s Production Linked Incentive (PLI) scheme has played a key role in encouraging Apple’s investment. Under this scheme, smartphone manufacturers receive subsidies based on sales growth. As a result, iPhone exports from India surged to $17.4 billion in 2024–25, with 97.6% of them going to the United States.
Impact of Trump’s Tariff on ‘Make in India’
Trump’s 25% tariff poses several challenges to both the ‘Make in India’ initiative and Apple’s strategy. Key impacts include:
1. iPhone Prices Could Rise Sharply
If a 25% tariff is imposed on iPhones made in India, prices in the U.S. are expected to spike. For instance, the iPhone 16 Pro Max, currently priced at $1,199, could cost as much as $2,000. This would burden American consumers and potentially reduce Apple’s global sales and profit margins.
If Apple chooses to move all production to the U.S., costs could rise even more due to higher labor expenses and infrastructure needs. Analysts estimate that a U.S.-made iPhone could cost between $1,500 and $3,500.
2. Impact on India’s Export Growth
Under ‘Make in India,’ iPhone exports from India have surged. However, Trump’s tariff could negatively affect India’s electronics exports. Ashok Chandak, President of the Indian Electronics and Semiconductor Association (IESA), said: “A 25% tariff could hurt India’s exports. Manufacturers might shift to lower-tariff countries like Vietnam.”
3. India-U.S. Trade Relations
Trump has labeled India a “high-tariff country,” although he acknowledged that India has offered to reduce tariffs on American goods. He has given a 90-day window for trade negotiations. If an agreement is reached, the tariff impact may be reduced. However, failure to reach a deal could have long-term consequences for India’s electronics exports and the ‘Make in India’ program.
Apple’s Strategy: Beating the Tariff Clock
Following Trump’s announcement, Apple began accelerating iPhone shipments from India to the U.S. The company recently shipped 600 tons of iPhones—around 1.5 million units—by air to beat the tariff deadline.
Additionally, Apple is scaling up its production in India through multiple steps:
- Foxconn and Tata Collaboration: Foxconn’s Chennai plant has begun Sunday shifts, previously a weekly holiday, to boost production.
- New Factories: Apple is building new plants in partnership with Tata and Pegatron across South India.
- Export Surge: In March 2025, India saw a 219% year-over-year increase in iPhone exports.
Opportunities and Challenges for ‘Make in India’
Despite Trump’s tariff, there are some potential opportunities for the ‘Make in India’ program:
- India as an Alternative to China: Trump announced a 54% tariff on Chinese goods and 46% on Vietnamese imports. In comparison, the 25% tariff on Indian goods is relatively lower, making India an attractive manufacturing alternative.
- Export Growth: India’s electronics exports are rising rapidly, and ‘Make in India’ could further accelerate this growth.
However, challenges remain:
- Long-Term Tariff Impact: If the tariffs become permanent, they could deter future investments and hurt exports.
- Global Competition: Countries like Vietnam, with lower tariffs, could pose a competitive threat to India’s ambitions.
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