Apple still saves big with India-made iPhones, even if Trump slaps 25% tariff: Here's how

Even if the United States goes ahead with a 25% tariff on iPhones made in India, Apple would still save more by manufacturing there than bringing production home, according to a new report from the Global Trade Research Initiative (GTRI).

The report comes in response to US President Donald Trump’s threat to impose heavy tariffs if Apple continues to build iPhones outside the United States, especially in India.

Trump warns Apple CEO Tim Cook over India production

President Trump made his position clear on Friday, stating, "I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else."

He added, "If that is not the case, a Tariff of at least 25% must be paid by Apple to the US Thank you for your attention to this matter!"

During a visit to Qatar, Trump also expressed frustration directly to Apple’s CEO, "I had a little problem with Tim Cook yesterday. I said to him, 'my friend, I treated you very good. You're coming here with $500 billion, but now I hear you're building all over India... I don't want you building in India. India can take care of themselves.'"

Apple’s India push grows despite pressure

Despite the warnings, Apple has been ramping up production in India. The company manufactured around $22 billion worth of iPhones in the country in the financial year ending March 2025, 60% more than the previous year.

According to a Reuters report, Apple even used chartered cargo flights to ship 600 tonnes of iPhones to the US to avoid potential cost hikes due to the tariff threat.

Labour costs in India a big advantage

The GTRI report breaks down the economics behind iPhone manufacturing. Even with a 25% tariff, India remains far cheaper than the US for production.

Assembly workers in India earn about $230 a month, compared to around $2,900 in California, nearly 13 times more. Assembling a single iPhone in India costs about $30, whereas doing the same in the US would cost roughly $390.

If Apple were to shift all production to America, its profit per iPhone could drop from $450 to just $60, unless prices are raised sharply for consumers.

India plays a small but crucial part in the global iPhone chain

The iPhone’s global value chain spans multiple countries. While Apple keeps about $450 of a $1,000 iPhone’s value through branding and software, other parts come from around the world:

Taiwan: $150 (chipmaking)

South Korea: $90 (OLED screens and memory)

Japan: $85 (mainly cameras)

US suppliers: $80 (from firms like Qualcomm and Broadcom)

Germany, Vietnam, Malaysia: $45 (miscellaneous parts)

China and India, despite being the key locations for assembly, each earn only about $30 per device, less than 3% of the retail price.

Apple’s India plan gets a boost from government support

In addition to low labour costs, Apple benefits from India’s production-linked incentive (PLI) scheme. This further strengthens India’s case as a manufacturing hub for the tech giant.

The GTRI report argues that given the global structure of iPhone production and India’s cost advantages, it remains the most viable option for Apple, even under US pressure.