Apple Dodges Tariffs on Indian Imports, But Analysts Warn of Bigger Concerns

Apple has been granted a significant win in the US-India tariff war, as its iPhones and semiconductors will be exempt from new tariffs. However, analysts say the company's bigger concerns include its future product strategy and approach to artificial intelligence. Apple's diversified supply chain, high margins, and CEO Tim Cook's operations expertise put the company in a strong position to manage tariffs.

Apple has secured a significant win in the ongoing US-India tariff war, with its iPhones and semiconductors exempt from new tariffs imposed by President Donald Trump. The exemption is a notable victory for the tech giant, which has been actively diversifying its supply chain to mitigate the impacts of global trade tensions.

The new tariffs, which were announced on July 29, 2025, target a wide range of goods imported from India, including textiles, leather goods, and electronics components. However, finished smartphones, tablets, and other high-value consumer electronics, including Apple's iPhones, have been exempt from these tariffs for the moment. This exemption allows Apple to continue producing and importing its flagship iPhone 17 Pro in India without facing significant additional costs, as reported by Reuters [2].

The exemption is a result of ongoing trade negotiations between the United States and India. While the tariffs were initially announced as a response to India's purchase of Russian oil, the exemption of electronics highlights the complex nature of global trade dynamics and the strategic importance of the Indian market for Apple.

Analysts, however, are focusing on Apple's long-term strategy and approach to artificial intelligence (AI) as the company navigates the volatile tariff landscape. Apple's diversified supply chain, high margins, and CEO Tim Cook's operational expertise position the company well to manage tariffs and other global challenges. Navkendar Singh, AVP at IDC, noted that the exemption of electronics from the tariffs may accelerate investment in India's manufacturing ecosystem [2].

The exemption of Apple's iPhones and semiconductors is a temporary relief, and the company will continue to monitor the evolving tariff situation. The US government has warned that the exemption could be withdrawn if India does not change its course on trade and oil procurement. Neil Shah, Co-founder and VP at Counterpoint Research, stated that the electronics exemption is more of a negotiation tactic to put pressure on India and achieve leverage in overall trade negotiations [2].

In the long run, India remains a strategic location for Apple, both in terms of supply and sales. The electronics supply chain and manufacturing are inherently complex and take decades to build. Therefore, it is nearly impractical to pressure OEMs and supply chains to set up operations in the USA. Apple's initial manufacturing shift to India may sound costly, but it will make sense in the long run, driven by the company's strategic positioning and expertise in global operations.

References:
[1] https://appleinsider.com/articles/25/08/06/apples-iphone-manufacturing-plan-hit-by-trump-doubling-tariffs-on-india
[2] https://www.businessworld.in/article/apple-iphone-17-pro-india-made-flagship-poised-to-slip-past-trumps-tariff-net-566436