Apple to move assembly of US phones to India in shift away from China

Amidst Apple’s struggle with President Donald Trump’s trade dispute between the United States and China, the company has outlined strategies to shift most of the iPhone production for the U.S. market to India by late 2026. This initiative aims to increase their present manufacturing capacity in the South Asian country twofold and reduce reliance on Chinese factories.

The major technology company manufactures 48 million iPhones out of the total 60 million sold in the U.S., with production taking place in China. This significant output shift could aid in reducing expenses related to increasing tariffs imposed on goods from China.

The Financial Times initially reported about Apple’s plans on Friday.

Apple, valued at over $3 trillion, is allegedly holding talks with manufacturing partners in India, such as Foxconn and the Tata Group, to implement this strategy, as reported by Reuters citing an anonymous source.

The large technology company has already increased manufacturing in India as a response to tariffs introduced during the initial Trump administration. This Silicon Valley-based firm exported $2 billion worth of iPhones in March, representing approximately 600 tons of goods sent from India to the U.S., which set a new record for both Tata and Foxconn, according to Reuters reports.

India’s Prime Minister, Narendra Modi, is advocating for his nation to become a leading center for worldwide smartphone manufacturing. This year, India decided to eliminate certain import duties on components used in making mobile phones—a move intended to benefit firms such as Apple.

If imposing import duties on intermediate products, you won’t truly be able to compete with those who aren’t doing so," stated Babak Hafezi, CEO of Hafezi Capital—a global advisory company—during an interview with Al Jazeera. "Their aim is to maximize competitiveness to emerge as the top production center.

During the 12 months leading up to March 2025, Apple managed to assemble approximately $22 billion worth of iPhones in India, marking a 60% rise compared to the previous year, according to a Bloomberg report. Despite this expansion, only 20 percent of all iPhones worldwide were manufactured in India.

Roadblocks

The change in production will be costly for Apple. As reported by Reuters, relying on India for iPhone manufacturing is 5-8 percent pricier compared to producing them in China, according to an anonymous source.

"India can assist, yet it won’t significantly reduce China’s role for Apple. This transition will require several years due to Apple being impacted by the tariff issues," said Dan Ives, an analyst from Wedbush Securities, to Al Jazeera.

Earlier this week, according to The Information—a technology news source—Chinese officials have imposed obstacles for Apple’s manufacturing partners looking to shift their operations from China to India. These barriers include delaying or even blocking equipment shipments without providing reasons. For instance, Foxconn faced denials of export requests at times, with some approvals being held off for as long as four months.

According to Ives, when it comes to the main assembly of iPhones, shifting a considerable part of production from China to India would require several years. This statement pertains to the components sourced from China which then get assembled in India to complete the products.

Ives also mentioned that shifting the assembly of U.S.-bound iPhones entirely to India might result in costs ranging from $30 billion to $40 billion for Apple.

There are worries about whether India’s infrastructure will be able to manage the increase in production as well.

“They have massive amounts of infrastructure problems in terms of traffic and mobility, and all these different variables that make the cost of the production longer, which eventually cost more money for the company,” Hafezi added.

"You require robust, constant, and efficient infrastructure to optimize your manufacturing capabilities and maintain global competitiveness," he went on to say.

Apple’s action follows the Trump administration indicating a readiness to reduce trade strains between the U.S. and China. This shift occurs due to worries over the economic consequences of the tariff dispute.

On Friday, Trump stated that he had communicated with Chinese President Xi Jinping but didn’t specify when their most recent conversation took place. During an interview for TIME magazine earlier that week, Trump mentioned that his team was engaged in discussions with Beijing aimed at reaching a tariff agreement. However, China has refuted these claims of ongoing trade negotiations with the U.S.

However, negotiations for a trade deal with India are currently ongoing. This week, U.S. Vice President JD Vance had a meeting with India’s Prime Minister Modi, where Vance stated they have "made good progress" toward what is anticipated to be a mutually beneficial trade agreement between their two nations.

The announcement about Apple moving operations to India precedes their upcoming earnings report, set for release on Thursday.