Trump calls back Apple to US; will India be caught in the crossfire?

Politics and economics

The story isn’t just about politics, but also about economics. In 2024, Apple posted revenues of $391 billion. While the Americas, including the US, still accounted for the largest chunk at 43 per cent ($167 billion), international markets are increasingly central to the company’s bottom line.

Europe brought in 26 per cent ($101 billion) of total revenue, Greater China added another 17 per cent ($67 billion), Japan contributed 6 per cent ($25 billion), and the rest of the Asia-Pacific region made up 8 per cent ($30 billion). The numbers tell a clear story: Apple may be born in California, but its business and its future is very much global.

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China’s factory floor

Although Apple began as a garage-born American company in the 1970s, it didn’t take long for it to turn outward in search of cost efficiencies. In the early 2000s, Apple struck a pivotal partnership with Foxconn, a Taiwanese electronics giant with vast operations in China.

By 2007, Foxconn’s Zhengzhou facility, nicknamed ‘iPhone City’, had become Apple’s global production hub, assembling over 90 per cent of the world’s iPhones by the 2010s.

Thanks to China’s massive labour force, integrated supply networks, and robust logistics, Apple kept production costs low and retail prices competitive. But that model began to wobble in 2017, when the Trump administration launched a full-scale trade war with China.

Tariffs on Chinese goods soared to 125 per cent by 2025, forcing Apple to reconsider its heavy dependence on the country. Then came COVID. China’s strict “zero-COVID” lockdowns, especially at Foxconn’s Zhengzhou plant, triggered widespread disruption and protests.

The risks became impossible to ignore. Apple began quietly spreading out its manufacturing base, encouraging suppliers to expand into Southeast Asia and South Asia. Leading that shift was India.

Also Read: Apple's India investment plans intact despite Trump's remark: Report

Spreading base in India

India’s rise in Apple’s manufacturing playbook has been nothing short of dramatic. By March 2025, Apple had assembled $22 billion worth of iPhones in India: a 60 per cent increase over the previous year. The country now produces 20 per cent of global iPhone output, with projections suggesting that figure could rise to 25 per cent by next year.

Apple also plans to make all US-bound iPhones in India by the end of 2026, unless policy or political shocks interfere.

At the heart of this shift is Tamil Nadu, home to Foxconn’s vast 500-acre facility in Sriperumbudur near Chennai. Employing around 40,000 workers, many of them women, the plant produces four iPhone models and is undergoing further expansion. Pegatron operates another unit near Chennai, while Tata Electronics runs a factory in Hosur making earlier iPhone models.

Also Read: What do Apple and India lose if assembly moves to the US?

Ambitious projects

Karnataka has become a new anchor in Apple’s India ambitions. Tata Electronics has taken over the former Wistron plant in Kolar district near Bengaluru, and Foxconn is building a massive facility in Devanahalli near the city’s airport. The Devanahalli plant spans 300 acres, represents an investment of Rs 22,000 crore, and is expected to generate 50,000 jobs.

Production is set to begin in June 2025, with full operations by 2027. In total, analysts estimate that Apple’s component manufacturing and supply chain activities in India have already created around 200,000 jobs.

Other Apple-linked manufacturing sites include Sunny Opotech in Tirupati (making camera modules), Foxlink in Oragadam (producing charging cables), Jabil in Pune (for AirPods components), and Foxconn’s AirPods-focused unit in Telangana.

Tamil Nadu’s PLI advantage

Tamil Nadu’s success isn’t accidental. State Industries Minister TRB Rajaa credits it to a well-developed ecosystem. While he declined to comment specifically on Apple’s operations, he emphasised that the state’s track record in electronics manufacturing has been built over the years through investments in skilling, infrastructure, and MSME support.

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“The PLI scheme (Production Linked Incentive scheme started by the government to boost local manufacturing and attract investments) has been an effective policy tool nudging investors towards India,” Rajaa told The Federal.

“But what truly made it work in Tamil Nadu’s electronics sector is the robust foundation that was already in place.”

He noted that incentives alone don’t transform industries; it’s the readiness of the talent pool and continuity in policy that make a real difference.

Trump making a viable demand?

Just as India’s Apple ecosystem seemed to be hitting its stride, Trump’s comments introduced a note of uncertainty. Speaking at a summit in Doha, Trump said Apple should not be producing iPhones for American consumers in India. He claimed Tim Cook had agreed to increase US-based manufacturing, though he offered no proof or details.

The response from industry watchers was swift. Dan Ives of Wedbush Securities called the idea “a non-starter,” estimating the cost of an all-American iPhone could balloon from $1,000 to over $3,000. Prashant Girbane of the MCCIA questioned whether US consumers would be willing to pay such a steep premium.

Most analysts dismissed Trump’s remarks as political theatre rather than a viable economic proposition. Apple’s deep and complex supply chain isn’t something that can be uprooted for a campaign soundbite.

Also read: Apple to double annual iPhone output in India by end of 2026 amid trade war

Airlift to avoid a price shock

Apple’s urgency to adapt to shifting trade winds was on full display in late March 2025, when it chartered 33 freighter jets to airlift 600 tons or about 1.5 million iPhones, from Chennai to the United States.

The move, made just days before new tariffs took effect, allowed Apple to bypass customs delays and temporarily insulate US consumers from potential price hikes.

Without the airlift, Counterpoint analyst Arun Menon warned the iPhone 16 Pro Max could have jumped from $1,599 to as much as $2,300. Bloomberg Intelligence's Woo Jin Ho noted the operation “bought Apple 90 days of pricing stability” in what he described as “the most volatile trade landscape since the 1970s oil shocks.”

Apple upbeat on India stint

Some observers have speculated about Trump’s motivations, especially given his history of transactional diplomacy and blurred lines between policy and personal interest.

Notably, Trump recently accepted a private jet as a gift, which critics say reflects his tolerance for favours that could be seen as bribes. While there’s no concrete evidence that he sought personal gain from Apple, the optics have certainly raised eyebrows.

Still, most commentators believe his push is driven more by political promises to create domestic jobs than by any backroom deal-making.

Also read: India smartphone market | Apple grew 25 pc in March quarter, Vivo market leader: Report

Despite political pressure, Apple appears committed to its India-centric strategy. The company aims to have all iPhones bound for the US market produced in India by the end of 2026. Markets seem confident in Apple’s direction as its stock dipped just 0.4 per cent following Trump’s remarks, signalling investor belief in the company’s long-term vision.