Trump Tells Apple to Halt iPhone Production in India, Promises U.S. Expansion

US President Donald Trump has asked Apple CEO Tim Cook to stop building iPhone plants in India, citing high tariff barriers and difficulty selling US products in the country. Trump said Apple will instead increase production in the US. Apple plans to import most of its iPhones from India by the end of 2026, but Trump's comments may disrupt this strategy. The move is part of Apple's efforts to diversify its manufacturing beyond China amid concerns over tariffs and geopolitical tensions.

Apple's iPhone exports from India have surged significantly, reflecting the company's strategic shift in response to global tariffs. According to government filings by Apple's vendors, iPhone exports from India more than doubled in April, reaching ₹17,219 crore ($2.06 billion), up 116 percent from the same month last year [1]. This increase is part of Apple's ongoing efforts to diversify its manufacturing base beyond China, amid concerns over tariffs and geopolitical tensions.

The significant increase in iPhone exports from India is consistent with Apple CEO Tim Cook's announcement during the company's second-quarter earnings call. Cook stated that a majority of iPhones for the U.S. market would begin to be airlifted from India starting this quarter. This shift is driven by the difference in tariffs. The U.S. government has imposed a 20 percent duty on smartphone imports from China, while there is currently a zero tariff on exports from India for a three-month period. Experts suggest that even in a worst-case scenario, this tariff might rise to 10 percent, the base duty the U.S. intends to apply broadly [1].

The move to increase production in India is also supported by new manufacturing capabilities. A new Tata Electronics plant in Hosur, Tamil Nadu, and a major Foxconn facility in Bengaluru are reportedly starting iPhone production. Apple has been increasing exports since December 2024 in preparation for global tariffs, with a peak in March as new reciprocal tariffs came into effect [1].

However, recent comments from U.S. President Donald Trump may disrupt Apple's strategy. Trump has asked Apple CEO Tim Cook to stop building iPhone plants in India, citing high tariff barriers and difficulty selling U.S. products in the country. Instead, Trump has asked Apple to increase production in the U.S. [2]. This move is part of Apple's efforts to diversify its manufacturing beyond China.

To meet the entire U.S. demand for iPhones from India this year, Apple's production in the country would need to double from the current ₹1.89 trillion (22 billion) to ₹3.5 trillion (40 billion) within the next 18 months. Of this, nearly ₹3.1 trillion ($35 billion) would be for export. This ambitious scale-up would necessitate significant reforms in India's taxation, tariffs, and industrial infrastructure [1].

The shift in iPhone exports to the U.S. from China has been driven by the new tariffs. United States smartphone shipments leaped 30 percent year over year in March as manufacturers raced to bring new inventory into the country ahead of the tariffs. The share of U.S.-bound shipments from India rose from 16 percent in the first quarter of 2024 to 26 percent in the first quarter of 2025 [2].

The U.S. smartphone market's growth in the first quarter was driven by Apple building up its inventory ahead of the new tariffs. The U.S. market is expected to experience "considerable volatility" over the next two or three quarters due to uncertainty around tariffs and weakening consumer confidence [2].

References:
[1] https://www.iclarified.com/97292/apple-iphone-exports-from-india-surge-116-report
[2] https://www.pymnts.com/supply-chain/2025/tariffs-drive-smartphone-manufacturers-boost-united-states-inventory-shift-sourcing-india/