Apple is reportedly planning to shift the assembly of all iPhones destined for the United States market entirely out of China and into India.
According to sources familiar with the matter cited by the Financial Times, the tech giant is aiming to complete this substantial transition by the end of 2026, representing a major acceleration of its supply chain diversification efforts away from its long-standing Chinese manufacturing base. This ambitious plan would involve producing over 60 million US-bound iPhones annually in India, effectively requiring Apple to more than double its current iPhone output within the country in just over a year.
This accelerated timeline seems directly linked to the escalating trade tensions and tariff uncertainty between Washington and Beijing. President Donald Trump’s administration has imposed significant tariffs on Chinese goods, recently hitting a sweeping 145%, although electronics like iPhones received a temporary exemption secured after talks involving CEO Tim Cook. However, Trump has indicated this relief might be short-lived, creating significant risk for Apple, which currently assembles an estimated 80-90% of its iPhones in China.
The potential financial impact is stark, with reports suggesting Apple’s market capitalization took a hit of up to $700 billion at one point due to investor concerns over its supply chain exposure to these geopolitical risks.
To achieve this rapid shift, Apple is reportedly holding urgent discussions with its key manufacturing partners in India, primarily Foxconn and Tata Electronics. Both companies already operate large-scale assembly facilities in the country and are said to be expanding capacity, with Foxconn and Tata reportedly building new plants in Southern India.
Apple has already demonstrated the urgency of this pivot, significantly ramping up shipments from India to the US in recent months. Reports indicate nearly $2 billion worth of iPhones, equating to roughly 600 tons of devices, were shipped from India to the US in March alone, likely to build inventory ahead of potential tariff hikes on Chinese-made goods.
While this marks a decisive move to de-risk its US supply chain, challenges remain. Manufacturing costs for iPhones are reportedly still 5-10% higher in India compared to the highly optimized ecosystem Apple spent decades building in China. Furthermore, while final assembly for US models may move, Apple still relies heavily on China for a vast number of components used in its devices, and China will likely remain a critical hub for iPhones sold in other global markets, as well as for products like Macs and iPads.
Despite White House suggestions that Apple could bring manufacturing home, analysts widely dismiss the possibility of US-based iPhone assembly due to significantly higher costs, with one analyst estimating it could push the price of an iPhone towards $3,500.
(via the Financial Times)
