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President Donald Trump has instructed Apple's Tim Cook to cease developing operations in India to create gadgets for the United States, urging the iPhone maker to increase local manufacturing as it shifts away from China.
"I had a little problem with Tim Cook yesterday," Trump remarked about his meeting with Apple's CEO in Qatar, where he is on a state visit. "He is building across India. I do not want you building in India." Following their conversation, Trump stated that Apple will be "upping their production in the United States."
Apple personnel in India did not reply to a request for comment.
Trump's statements threaten to derail Apple's plan to import the majority of iPhones sold in the United States from India by the end of next year, hastening a shift away from China to offset tariff and geopolitical risks. Apple manufactures the majority of its iPhones in China and has no smartphone production in the United States, but it has committed to recruit more people at home and to invest $500 billion (approximately Rs. 42,72,543 crore) locally over the next four years.
Even the cash-rich Apple will struggle to build iPhones from scratch in the United States. The supply chain for iPhones and skilled labor for such a carefully constructed product have long been centered in China, and Apple has only recently begun to form local relationships in India. iPhone manufacture in the United States is likewise unsustainable due to high labor and manufacturing costs. India, on the other hand, is one of Apple's fastest-growing regions, with a sizable consumer base eager to purchase its famous devices. The country also receives government subsidies to help it expand assembly.
"This is a familiar Trump tactic: He wants to push Apple to localize more and establish a supply chain in the United States, which will not happen overnight," said Tarun Pathak, research director at tech analytics firm Counterpoint. "Making in the US will also be much more expensive than assembling iPhones in India."
Apple and its suppliers have expedited a transition away from the world's second-biggest economy, which began when draconian Covid lockdowns hampered output at its largest facility. Trump's tariffs, along with tensions between Beijing and Washington, pushed Apple to step up its efforts.
The iPhone manufacturing facilities in India manufacture more than 40 million handsets each year, accounting for around 20% of Apple's yearly output. While Trump has encouraged Apple to produce iPhones in the United States, a dearth of domestic engineering and manufacturing skills will make this practically impossible in the medium term.
The company "has one of the most sophisticated supply chains built out over years," Pathak told me. "To disrupt that or to completely move out of India or China will be extremely difficult."
Trump's words indicate that he is comfortable with Apple developing items in India for that market. "You can build in India if you want, to take care of India," according to him.
Trump also mentioned trade discussions with India, claiming the South Asian country had offered to lower import levies on US goods. Trump said that India has one of the world's highest tariff barriers, making it difficult to sell American products in the world's most populated country.
The majority of India's iPhones are built at Foxconn Technology Group's plant in southern India. Another significant supplier is Tata Group's electronics manufacturing arm, which acquired Wistron Corp.'s local company and now manages Pegatron Corp.'s operations in India. According to Bloomberg News, Tata and Foxconn are also expanding their production capacity in southern India by establishing new factories.
Apple produced $22 billion (approximately Rs. 1,87,991 crore) worth of iPhones in India in the fiscal year ending in March, up nearly 60% from the previous year.
