A 25% tariff imposed by Donald Trump on products exported from India is set to impact Apple’s iPhone business, potentially leading to higher prices for consumers. The tariff, which comes into effect on August 1st, will affect the iPhones manufactured in India and exported to the United States.
This decision poses a challenge to Apple’s plans to use India as a key manufacturing and export base for the US market. The tax could significantly impact Apple’s export numbers from India, which currently account for around 25% of its iPhone shipments to the US.
Apple has been expanding its iPhone production in India, leveraging its China-plus-one strategy and relying heavily on manufacturers like Foxconn. In recent months, India has been a significant source of iPhones exported to the US, with India holding a strong position in the premium smartphone market in India.
Apple’s next move remains uncertain. They could choose to absorb the cost of the tariff or pass it on to consumers, which could lead to increased prices. Given the rising costs of components, particularly the newer, more expensive chips from TSMC, Apple faces pressure to manage costs or adjust prices.
Preliminary data reveals that Apple’s iPhone exports from India reached over $5 billion during the April-June quarter, representing around 70% of India’s total smartphone exports. This represents a substantial growth compared to the previous year’s figures.