Trump expresses disinterest in Apple constructing facilities in India
Trump's! Not the Apple of His Eye: US President Bluntly Turns Down India as iPhone Production Hub
In a stark contrast to India's manufacturing aspirations, the US President, Donald Trump, has openly expressed his disinterest in Apple shifting its production operations to India. During a recent visit to Doha, he made his sentiments crystal clear, expressing a preference for the iPhone maker to focus on expanding its manufacturing footprint in the United States.
"C'mon, Tim," Trump exclaimed, referring to Apple CEO Tim Cook. "We've been nice to you. You're rolling in $500 billion, but now I hear you're constructing across India," Trump stated, voicing his concerns.
"I don't want you coding in India," he repeated, reiterating his stance. "You can manufacture in India if you fancy taking care of India, because it's one of the world's highest tariff nations. So, it's arduous to sell in India."
The US President's remarks underscored the support extended to Apple by the US, despite its reliance on China for a majority of its iPhone production.
"Timmy, we're putting up with all those plants you built in China for years. We ain't squeezing India, my friend," Trump suggested, emphasizing the predominant role of China in iPhone production and the US' lack of interest in India as a production hub.
Trump conclusively stated that Apple would be increasing its production in the US.
According to reports, China currently accounts for over 75% of global iPhone production, while India contributes to approximately 18%.
Apple, however, is making strides to shift a significant portion of its US-sold iPhones to Indian factories by the end of 2026, in response to political and commercial pressures. The CEO of Apple, Tim Cook, had earlier anticipated "most iPhones sold in the US will originate from India".
In more recent weeks, Apple has amplified its production in India to counteract US tariffs, shipping a record-breaking 600 tons of iPhones worth $2 billion to the US in March. Tata and Foxconn, the two main suppliers, accounted for smartphones worth $1.3 billion and $800 million, respectively.
In its aggressive push to expand manufacturing in India, Apple is adopting multiple strategies:
1. Diversification from China ("China+1" Strategy):Apple is keen on reducing its reliance on China for iPhone manufacturing by diversifying its production locations as part of the "China+1" approach. India, with its favorable business environment, has become an essential part of this strategy.
2. Production-Linked Incentive (PLI) Scheme in India:The Indian government's PLI scheme offers financial incentives to smartphone manufacturers, making India an attractive proposition for manufacturing investment. Apple has pledged to maintain its investment plans in India, buoyed by this support.
3. Market and Supply Chain Factors:- The domestic market in India is expanding rapidly, necessitating local production to meet government requirements and avoid import tariffs.- To cater to the US market with iPhones assembled outside China due to tariffs, Apple is broadening its manufacturing base in India.
4. Commercial Decisions Based on Productivity and Competitiveness:Apple and its supply chain partners make production location decisions based on factors such as revenue potential, productivity, and competitiveness, not merely political pressure. Indian officials highlight these commercial realities as the driving force behind Apple's manufacturing choices.
5. Logistical and Operational Hurdles Being Addressed:Apple has confronted challenges in India, including intricate labor laws, supply chain quality issues, and delayed equipment shipments. However, it has successfully advocated for more lenient working conditions and continues to advance its production capacity, overcoming these barriers.
In essence, Apple's expanded manufacturing in India is largely a commercially driven move aimed at diversifying supply chains away from China amid escalating trade tensions, capitalizing on Indian incentives, and addressing both local and US market demands, in spite of political resistance.
- Despite US President Donald Trump's assertions, Apple is planning to increase its position in India, aiming to manufacture a significant portion of iPhones sold in the US by the end of 2026.
- In the technology industry, Apple is adopting a diversification strategy, or the "China+1" approach, to reduce its reliance on China for iPhone production by expanding its operations in other countries, such as India.
- The Indian government's Production-Linked Incentive (PLI) scheme, offering financial incentives to smartphone manufacturers, has played a crucial role in Apple's decision to increase its investment in India's technology industry.
