Apple’s ambitious shift of iPhone manufacturing to India is encountering fresh challenges as former President Donald Trump threatens a 25% tariff on all foreign-made smartphones, including iPhones assembled in India. Despite this, a recent report by the Global Trade Research Initiative (GTRI) suggests that producing iPhones in India remains more cost-effective than relocating production to the U.S

Apple’s Manufacturing Pivot to India

In response to escalating U.S.-China trade tensions, Apple has been diversifying its supply chain by increasing iPhone production in India. Foxconn, Apple’s primary assembly partner, has invested $1.5 billion to expand its manufacturing infrastructure in southern India. This move is part of Apple’s broader strategy to reduce reliance on Chinese manufacturingAccording to a GTRI report, assembling an iPhone in India costs approximately $30 per unit, significantly lower than the estimated $390 per unit if produced in the U.S. Even with a 25% tariff, the cost would rise to only $37.50, still far below U.S. production costs. This cost advantage is attributed to lower labor expenses and government incentives under India’s Production-Linked Incentive (PLI) scheme.

Trump’s Tariff Threat and Its Implications

On May 23, 2025, Trump announced plans to impose a 25% tariff on all smartphones not manufactured in the U.S., explicitly targeting Apple and Samsung. He emphasized that iPhones sold in the U.S. should be produced domestically, or else face the tariff. This announcement led to a significant drop in Apple’s stock value, wiping out approximately $70 billion.

Analysts warn that such tariffs could lead to higher consumer prices, supply chain disruptions, and potential inflation. The GTRI report indicates that the value of a $1,000 iPhone is distributed across various countries, with Apple retaining the largest share of $450 for brand, design, and software. The assembly process, primarily conducted in India and China, accounts for only about $30 per device.

Long-Term Outlook

Despite the tariff threats, Apple’s commitment to Indian manufacturing appears steadfast. The company plans to source more than 60 million iPhones annually from Indian factories by 2026. This strategy not only mitigates geopolitical risks but also leverages India’s cost advantages and growing skilled labor force.

However, the imposition of tariffs could strain U.S.-India trade relations and impact global supply chains. While Trump’s policies aim to bolster domestic manufacturing, the feasibility of shifting complex production processes to the U.S. remains questionable due to higher costs and infrastructure challenges.

 Ford Motor Company is set to revive its inactive manufacturing facility near Chennai to produce and export engines and related components, marking a significant shift in its India strategy. The plant, located in Maraimalai Nagar, has been idle since mid-2022.

Sources familiar with the development revealed that vehicle manufacturing will not be part of Ford’s renewed operations in India. Instead, the company is repurposing the facility exclusively for export-oriented engine production as part of its broader global strategy.

“Ford is going to be making engines at the Chennai plant,” one source said. “The facility will be focused entirely on exports.”

Ford ceased vehicle production in India in 2021 and formally exited the market in 2022 after years of limited success. Over its two-and-a-half-decade presence, the company struggled to secure a significant share in the competitive Indian automotive sector.

Despite earlier speculation that Ford might abandon its India plans, particularly amid global policy shifts promoting local manufacturing in other regions, the latest updates confirm the company’s commitment to repurposing the Chennai unit.

Recent high-level discussions between Ford executives and the Tamil Nadu government have reaffirmed this direction, with the automaker indicating its long-term intent to operate in the state through export-led manufacturing.

The company also maintains an export presence through its former facility in Sanand, Gujarat, much of which was sold to Tata Motors two years ago. The remaining assets continue to support Ford’s global supply chain.

While Ford previously explored the possibility of re-entering the Indian market with electric vehicles—including feasibility studies for models like the Mustang, Endeavour, and Everest—those initiatives are currently on hold in light of the new export-focused model.

Ford has shut down all its dealerships in India, retaining only service centres to support existing customers. Industry experts view the current strategy as a pivot from domestic sales to leveraging India’s manufacturing capabilities for global supply.

An official announcement detailing the full scope of the Chennai plant’s reactivation is expected in the second quarter of this year.

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur.

Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt.

Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus.

Nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo.

“Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat”

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur.

At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga.