Apple to Source More iPhones From India to Offset China Tariff Costs [Report]

Apple is planning to source more iPhones from India to counter the steep tariffs imposed on Chinese goods, according to new report from the WSJ. The move comes as the company navigates a complex trade landscape under President Trump's latest tariff policies, which have significantly raised costs for its flagship product.

The strategy serves as a temporary fix while Apple seeks an exemption from the tariffs, a concession CEO Tim Cook secured during Trump's first term. For now, the company views the situation as too volatile to overhaul its China-centric supply chain. Trump's new tariff package, announced recently, sets levies on Chinese goods at a minimum of 54%, with Indian goods facing a 26% rate. On April 7, Trump warned of further increases on China if it doesn't lift its retaliatory duties, introduced after the U.S. tariff plans surfaced on April 2.

The iPhone drives roughly half of Apple's revenue, making its production costs a critical concern. With China as the hub of its manufacturing, the company's stock took a hit, dropping 19% over three days—the worst such stretch in nearly 25 years—amid investor fears over tariff exposure. Bank of America analyst Wamsi Mohan noted that Apple was set to produce about 25 million iPhones in India this year before the tariffs emerged. Typically, 10 million of those would stay in India, but redirecting the full output to the U.S. could cover about half of American demand.


Tariffs on Chinese-made iPhones could tack on $300 to the $550 hardware cost of an iPhone 16 Pro, which retails for $1,100, per TechInsights estimates. By sourcing from India, where the tariff is lower, Apple could soften that blow. Still, shifting production entirely to the U.S. remains impractical. Analysts and suppliers argue the costs would far exceed even the tariff penalties. Research firm Wedbush pointedly remarked that a $3,500 iPhone would be the price tag for domestic manufacturing.

Apple has been ramping up iPhone assembly in India since 2017, starting with older models and progressing to newer ones. This shift labels India as the country of origin, as the devices are transformed there from components into finished products. The approach reduces reliance on China and sidesteps India's import tariffs for local sales in a booming smartphone market. Yet China remains the backbone of production, with partners like Foxconn leveraging its vast supplier network and skilled workforce.

Beyond iPhones, Apple is boosting U.S. manufacturing in other areas. The company is investing in AI servers for services like Apple Intelligence and, in February, pledged over $500 billion over four years to American production. That includes buying advanced chips from Taiwan Semiconductor's Arizona plants, a move Trump has highlighted as a win for his policies. Meanwhile, Vietnam, a growing base for AirPods, Apple Watches, and iPads, faces a 46% tariff—close to China's rate—though Trump hinted at a possible reprieve after talks with Vietnam's leader last week.

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