
Apple Inc. is turning to India for manufacturing iPhones as soon as late 2026, to bypass sweeping tariffs in an escalating trade war as well as ease supply chain headaches. If achieved, the plan would essentially shift all production for U.S.-sold iPhones to India from China, where the steepest tariffs are targeted by the Trump Administration.
The bold gambit, first reported by The Financial Times, represents a Herculean effort. The company would need to double its annual iPhone production in India to more than 80 million units, according to the report. Apple sells about 60 million iPhones in the U.S. each year.
The company has taken steps in the recent years to expand manufacturing capacity in India, where about one in five iPhones are made. There, the company increasingly is relying on third-party partners Foxconn and Tata Electronics, which have helped boost production of the smartphones by nearly 60% from a year ago. Both companies are also building plants in southern India to jack up production capacity even more, according to Bloomberg.
For Apple and its operational wizard, company CEO Tim Cook, the decision to shift iPhone production to India is a no-brainer. After President Donald Trump declared “Liberation Day” with worldwide tariffs April 2, Apple’s market valuation was eviscerated by $700 billion. The company sources its components from all corners of the plant, with up to 90% of iPhones believed to be assembled in China. Since his pronouncement, Trump has put a 90-day pause on tariffs, with the exception of a 145% levy on China that could be lowered.
As Apple increasingly leans on India, the White House insists the company can return manufacturing to American shores. Apple did commit to spend up to $500 billion on infrastructure projects in the U.S. over the next four years, though most experts greatly doubt that is likely — or realistic.
Apple’s production puzzle comes as it struggles to catch up with rivals Samsung Electronics and Alphabet Inc.’s Google to roll out artificial intelligence (AI) features in its phones. Such features are vital in China, where Apple is hemorrhaging market share to Huawei and other phone makers. Shipments of iPhone in China slipped 9% in the first quarter, the only major smartphone maker to lose ground in the region, according to data from market researcher IDC.
Though Apple announced a partnership with Alibaba on AI services in China, it hasn’t provided a timeline for availability.
Apple is scheduled to report fiscal first-quarter earnings next week.