As Apple expands its manufacturing footprint in India, analysts caution that any effort to relocate iPhone production to the United States could backfire, especially for American consumers.
With Apple’s supply chain deeply entrenched in Asia, shifting production stateside would result in significantly higher costs, longer lead times, and ultimately, more expensive iPhones.
Analysts said Rebuilding Apple’s sophisticated manufacturing ecosystem in the U.S. would take at least two to three years, even with heavy government subsidies. In contrast, India has emerged as the only viable large-scale alternative to China, thanks to its growing pool of English-speaking skilled labour, favourable government policies such as the Production Linked Incentive (PLI) scheme, and a vast domestic market that adds to its strategic importance.
The warnings follow renewed pressure from former U.S. President Donald Trump, who stated on Friday that iPhones sold in the U.S. should be manufactured domestically, not in India or any other foreign country. Trump said he had already conveyed this expectation directly to Apple CEO Tim Cook and threatened to impose “at least a 25%” tariff on the company if it fails to comply.
However, India, not the U.S., has emerged as Apple’s most practical alternative to China.“India remains the only potential big manufacturing destination for any player beyond China as the ecosystem is mushrooming, aided by lower-cost English-speaking skilled labour, world-class software talent, favourable government policies such as PLI, and a huge domestic consumption market,” said Tarun Pathak, Research Director at Counterpoint, in an interview with Moneycontrol.
Pathak noted that Apple’s supply chains are heavily concentrated in Asia and won't shift unless the U.S. government provides substantial subsidies to offset the disadvantages. “Even then, it will take 2–3 years,” he said.
“We still think these are very initial days and might evolve into something different. This can go in different directions, but we are maintaining that China and India will continue to play a key role in manufacturing operations for now,” Pathak added.
Analysts also point out that while every government aspires to localise manufacturing, executing that goal is far from simple. Apple has spent nearly 15 years developing a highly complex and efficient manufacturing ecosystem across Asia. Replicating this in the U.S. would be a massive challenge.
Upasna Joshi, Research Manager at IDC, agreed that India has made substantial progress in scaling up local production and is currently the most preferred manufacturing destination outside China. “Having said this, China, the USA, and India are also the countries with the biggest consumption of smartphones in terms of shipments,” Joshi said.
“While China is a well-established manufacturing destination, we are not far, since India has also been elevating in terms of scaling up local production for almost a decade now, thus feeding international markets. However, considering the current manufacturing scale in the USA and its huge dependency on China/India/or other Asian countries, it will still require few years before becoming self-sufficient,” she added.
Joshi also pointed out that while India has scaled production using skilled but affordable labour and government incentives, the country still depends on sourcing key components, keeping it from achieving full cost parity with China.
“Assuming subsidies on establishment and infrastructure cost offered by the US government, the initial 1–2 years will still witness higher production costs and gradually decrease over the years. Till then, a substantial price differential will remain in iPhones manufactured in India compared to China and the USA,” she said.
Faisal Kawoosa, founder and analyst at TechArc, echoed these concerns. “Trump seems determined to force Apple to move manufacturing to the US. It will be difficult for Apple to do in the short to mid-term. So they will have to continue sourcing from India and other markets,” he said.
An industry executive on the condition of anonymity said the cost disadvantages are real, and manufacturing iPhones in the U.S. would undoubtedly lead to a significant price hike of 30-40%. “However, if Trump is serious, Apple could start with limited domestic production to buy time, while continuing to import the bulk of its devices from China and India. Apple will look to buy time in the meantime,” he added.
Trump’s latest remarks come just a week after he urged Cook to stop producing iPhones in India. Cook had earlier announced that Apple would source the majority of iPhones sold in the U.S. from India in the June quarter, while China would continue to manufacture most of the devices for global markets.
Currently, Apple does not manufacture smartphones in the United States. Most of its iPhones are made in China, while India now accounts for around 15% of Apple’s total production, roughly 40 million units annually.
In the fiscal year ending March 31, Apple assembled 60% more iPhones in India, with an estimated production value of $22 billion.The bulk of this manufacturing is handled by Taiwanese contract manufacturer Foxconn’s facility in Tamil Nadu and Tata Electronics, which now manages Pegatron Corp’s operations. Both companies are expanding their capacity with new plants under construction.
According to Canalys, in April 2025, India shipped 3 million iPhones to the U.S., up 76% year-on-year. In contrast, shipments from China to the U.S. fell by 76%, down to just 900,000 units.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
