Apple to send more iPhones to US from India: report

Apple Inc. plans to send more made-in-India iPhones to the US to offset the high cost of tariffs amid a worsening trade war between Washington and Beijing, The Wall Street Journal reported, citing people familiar with the matter.

The measures are a short-term arrangement as the iPhone maker negotiates an exemption from US President Donald Trump’s tariffs that chief executive Tim Cook had managed to secure during the first Trump administration, the report said, adding that the tech firm sees the current situation as too uncertain to upend long-term investments in its supply chain, which is centered around China.

The US’s new tariffs raise levies on Chinese goods to at least 25% while imposing a 26% rate on Indian goods, with Trump threatening to load more tariffs on China if it doesn’t scrap retaliatory duties it announced after US tariff plans were unveiled on 2 April.

The iPhone makes up about 50% of revenue for Apple, whose heavy reliance on Chinese manufacturing has spooked investors amid Trump’s tariff tantrum.

Before the announcement of the tariffs, Apple had a mandate to produce about 25 million iPhones in India this year, of which 10 million would likely be set aside for the local Indian market, the WSJ report said, citing Bank of America analyst Wamsi Mohan.

If Apple, which has been looking to step up its India iPhone production, were to redirect all made-in-India iPhones to the US, it could meet about half of the demand there for this year, the report said.

The additional tariff on Chinese goods may add about $300 to the current $550 hardware cost to Apple of an iPhone 16 Pro that retails for $1,100, according to semiconductor industry platform TechInsights.

Apple could limit the damage by importing more units from India, where the tariff is about half as high, the report added.

Though Trump has called for a production boost in the US, analysts said moving iPhone production there will be a nonstarter as the cost would be far beyond the cost of paying tariffs.

“If consumers want a $3,500 iPhone, we should make them in New Jersey or Texas or another state,” research firm Wedbush said in a recent note.

Apple makes many iPhone components in China but in recent years has assembled more of the devices in India, the report said.

The strategy allows the company to stamp India as the country of origin for those devices as they undergo “substantial transformation” there—from a pile of parts to a functioning smartphone, it added.