Recent reports indicate that former U.S. President Donald Trump has urged Apple CEO Tim Cook to curtail the company's expanding manufacturing operations in India and instead prioritize increasing production in the United States. This request comes at a time when Apple is actively shifting iPhone production to India, with the company manufacturing approximately $22 billion worth of iPhones there in the year ending March 2025, a 60% increase from the previous year. Currently, one in five iPhones worldwide are made in India. Trump's stance raises questions about whether Apple can afford to comply, considering its strategic goals and the evolving global economic landscape.
Trump's opposition to Apple's India expansion stems from his broader economic policies, which prioritize domestic manufacturing and aim to reduce trade deficits. He has expressed concerns about India's high tariff barriers, despite claims that India has offered a zero-tariff deal to the United States. Trump believes that Apple should focus on building in the U.S., stating that "India can take care of themselves". He has also suggested that Apple will be "upping their production in the United States" as a result of his discussion with Cook.
Apple's move to India is driven by several factors, including the desire to diversify its supply chain away from China amid ongoing US-China trade tensions and to tap into the growing Indian smartphone market. The company now produces its entire iPhone lineup in India, including premium titanium Pro models. Foxconn, a key Apple supplier, plans to manufacture 25-30 million iPhones in India this year, doubling its previous output. Apple's vendors exported iPhones worth nearly ₹1.5 lakh crore in FY25, up from ₹85,000 crore in FY24. Apple intends to significantly increase iPhone production in India, with the goal of mitigating business risks from the Sino-US trade situation. India's iPhone output could rise to 70-80 million by 2026.
For Apple, the decision to comply with Trump's request involves weighing several factors. Shifting production back to the United States could entail higher labor costs and infrastructure investments. While Trump has emphasized the potential for advanced robotics to offset these costs, the transition would likely be complex and expensive. Moreover, reversing course on its India strategy could disrupt Apple's supply chain and hinder its growth in the Indian market.
On the other hand, adhering to Trump's vision could offer certain advantages. Increased domestic production might be viewed favorably by the U.S. government and could potentially lead to tax incentives or other forms of support. It could also enhance Apple's reputation as a company committed to American job creation.
Ultimately, whether Apple can afford to comply with Trump's request depends on its assessment of the long-term costs and benefits. The company must consider the economic realities of manufacturing in different countries, the geopolitical landscape, and its strategic objectives. While Trump's influence cannot be ignored, Apple's decision will likely be guided by its business priorities and its commitment to delivering innovative products to consumers worldwide.
