India’s discovery to become a major iPhone manufacturing hub has faced a significant obstacle. The US has implemented “mutual tariffs” on more than 180 countries including India, slapping with 26% tariffs. Although this rate is 54% of China and Vietnam’s 46%, Indian officials are still concerned about the impact on the country’s electronics manufacturing sector.
America is India’s largest trading partner, 18% of the total goods exports. 26% tariff can severely affect electronics shipments, profitability and supply chains. According to a Doordarshan news report, Ashok Chandak, president of the Electronics and Semiconductor Association of India (IESA), said that Tariff regime is an important challenge for India’s exports.
He said, “26 percent of tariffs imposed by the United States present an important challenge for India’s exports … while India is better than many other economies, these tariffs can potentially affect domestic industries, disrupt trade flows, and squeeze the profit margin”, he said.
Apple, which has transferred 15% of its iPhone production to India, is likely to be affected by tariffs. The company has to face 54% of duty on Chinese imports, which may lead to a significant increase in prices. Analysts estimate that the iPhone 16 Pro Max can cost around $ 2,300 or ₹ 1.9 lakh in Indian terms if Apple passes consumers at additional costs.
Although Apple has not commented on the developments related to Trump’s tariff, its stock exceeded 8% after the announcement – its worst day drop since 2020.
Despite the challenges, India remains an attractive destination for multinational companies to diversify its manufacturing works. Apple is increasing its footprint in India, and the government is hoping to take advantage of the moment to track a bilateral trade agreement with the US rapidly.
A senior industry official told the Times of India, “The support of corporations like Apple, Microsoft and Google can be sought to strengthen India’s pitch during BTA talks with Trump administration.”
India’s smartphone export drive, led by Apple’s contract manufacturers, is gaining momentum. Between April and January, India exported more than ₹ 60,000 crore iPhones 1 lakh crore in the same period last year. However, the new tariff has threatened to reduce these benefits, and India’s production for Apple is at risk.
A senior industry official told TOI, “There is a real opportunity that companies can start transferring new manufacturing to countries with low tariff exposure.”
While India may benefit from being a “less hit” than others in short term, long -term implications of tariffs are uncertain.
