Donald Trump’s imposition of a 25% tariff on Indian exports poses a challenge to Apple’s goal of establishing India as a major export hub for iPhones. The tariff, effective August 1, will impact iPhones made in India and shipped to the US, potentially affecting Apple’s manufacturing and export strategies.
Analysts indicate that the tariff could negatively affect Apple’s plans to use India as a key export location. Currently, around 25% of Apple’s iPhone shipments to the US originate from India.
Apple has been expanding its iPhone production in India, leveraging the China-plus-one strategy, primarily through Foxconn. Recent data shows that half of the iPhones shipped to the US were produced in India. Apple currently holds a 55% share of the premium smartphone segment in India.
Apple may opt to absorb the tariff costs or pass them on to consumers. Apple faces challenges due to rising component costs, particularly the expense of new 3nm chips from TSMC. They may need to find ways to reduce costs or raise prices, similar to Samsung’s approach to its foldable phones.
Preliminary data shows that Apple exported over $5 billion worth of iPhones from India in the April-June quarter (Q1 FY26), accounting for roughly 70% of the total smartphone exports from the country. This is a significant increase from the previous year.