Apple manufacturing in India may face major hurdles following a surprise US-China trade agreement. The deal sharply reduces tariffs between the two superpowers, casting doubt on India’s ambitions to replace China as the world’s production hub.
The change comes just weeks after Apple announced it would shift most US-bound iPhone production from China to India. That optimism faded when President Donald Trump revealed he advised Apple CEO Tim Cook not to expand in India due to high tariffs.
Trump’s administration slashed tariffs on Chinese goods from 145% to 30%. India’s exports now face 27% tariffs. This narrow gap may reduce India’s competitive edge. Experts warn that companies may stall investments in India or return to China.
Ajay Srivastava from the Global Trade Research Institute said India’s low-cost assembly lines may survive. However, he cautioned that high-value growth is now at risk.
Despite the tariff shock, India remains hopeful. Recent export orders from Indian manufacturers hit a 14-year high. Firms in electronics, textiles, and toys had begun benefiting from global supply chain shifts.
Still, experts say long-term success requires more than low tariffs. India needs reforms to simplify business rules, reduce logistics costs, and offer tax clarity. Without this, Apple manufacturing in India will struggle to grow beyond basic assembly.
Economists also point to India’s heavy dependence on Chinese parts for electronics. This limits its ability to build full supply chains locally. Currently, Apple earns $450 per iPhone sold in the US. India keeps just $25, despite the product being counted as a full export.
India’s PLI scheme has attracted some investment, but results remain mixed. Critics say some firms invest less than the subsidies they receive. Without deeper industrial development, India’s gains may remain on paper.
Worse, Chinese firms might use India to reroute goods to the US, exposing India to new scrutiny. While officials welcome foreign capital, experts warn this approach could weaken India’s domestic capabilities.
Apple manufacturing in India has symbolic value, but without structural reform, it won’t deliver lasting economic impact.
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