Apple’s iPhone exports from India to the US soared dramatically last month as it scrambled to avoid President Trump’s steep tariff on Chinese imports – but the big push could come at the expense of future growth.
Shipments of iPhones from India to the US jumped 76% in April from the year before, reaching roughly 3 million units, according to data from Canalys, now part of research firm Omdia.
Meanwhile, shipments from China, where the majority of iPhones have typically been manufactured, plunged about 76% from last year to just 900,000, according to the firm’s data.
The move to India is angering both Beijing, which wants the iPhone maker to maintain its manufacturing in China, and Trump, who has continued to pressure Apple to move all of its production to the US.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote in a post on Truth Social last week, threatening the company with a 25% tariff.
Beijing, meanwhile, has thwarted efforts by Apple’s suppliers in India to access some of the high-tech machinery and talent from China, according to reports from local news outlets in India.
A full pivot to US manufacturing appears unlikely for Apple, since it would take approximately five to 10 years and hike iPhone prices to an estimated $3,500, according to Wedbush Securities analyst Dan Ives.
And Foxconn, a major Apple supplier, recently announced a massive $1.5 billion investment in an India facility.
“We believe the concept of Apple producing iPhones in the US is a fairy tale that is not feasible given the labor/cost structure,” Ives wrote in a note Monday evening.
While Apple has seen enormous growth in India, it appears that momentum is poised to slow down through the rest of the year.
The US’ iPhone demand is estimated at a whopping 20 million units per quarter, and India is not expected to be able to match that output until 2026, according to Omdia.
“India’s manufacturing capacity isn’t expected to grow fast enough to take the entirety of US demand. It’s still too early,” Le Xuan Chiew, research manager at Omdia, told CNBC.
The White House in early April announced it would exempt iPhones and other consumer electronics from the president’s additional tariffs, including a rate that rose as high as 145% on China.
But that still left the $2.9 trillion company staring down a 30% tax on Chinese imports, pushing it to shift its supply chain to India.
Apple first started moving some production to India during the COVID-19 pandemic and ensuing supply chain crisis.
Apple’s iPhones made in India are still facing Trump’s baseline tariff rate of 10%, which affects most countries.
