Donald Trump’s decision to impose a 25% tariff on Indian exports is poised to challenge Apple’s ambitions to transform India into an iPhone export hub for the US. Effective August 1st, the US will levy a 25% tariff on all iPhone models currently exported from India. This move by Trump could significantly impede Apple’s manufacturing and export strategies in India.
According to a report, IDC India’s Associate Vice President, Navkendar Singh, stated that the 25% tariff on Indian exports will undoubtedly impact Apple’s plan to make India a major iPhone export center for the US. Approximately 25% of Apple’s iPhone shipments to the US originate from India, amounting to roughly $600 million annually. However, the new tariff poses a substantial setback for Apple’s export operations.
Apple has been expanding iPhone production in India, primarily through Foxconn, as part of its broader China-plus-one strategy. Half of the iPhones shipped to the US in recent months were manufactured in India. Apple holds a 55% market share in India’s premium smartphone segment.
Apple may choose to absorb the tariff costs or pass the increased prices onto consumers. Apple is already grappling with rising component costs, particularly the expensive new 3nm chips from TSMC. Therefore, they will need to cut costs elsewhere or raise prices, similar to Samsung’s approach with its foldables.
Preliminary data reviewed indicates that Apple exported over $5 billion worth of iPhones from India during the April-June quarter (Q1 FY26), representing approximately 70% of the country’s total smartphone exports. This marks a substantial increase from the approximately $3 billion in exports during the same period last year.