iPhone: Why India is the Apple of Tim Cook’s Eye

Apple’s manufacturing expansion in India faces hurdles as former US President Trump urged Apple to prioritize US investments instead. India, producing 40M iPhones annually, plays a key role in Apple’s supply chain diversification from China. Indian officials and analysts dismissed immediate impacts, citing supply chain complexities. While Trump promotes domestic production, Apple’s global operations prioritize efficiency. India’s growing manufacturing ecosystem remains crucial to Apple’s strategy despite geopolitical pressures shaping global trade dynamics.

Apple’s ambitious manufacturing expansion in India encountered a significant challenge this week as former US President Donald Trump publicly voiced his opposition to the company’s plans to produce iPhones in the country. Speaking at a summit during his trip to West Asia, Trump emphasized his preference for Apple to prioritize investment within the United States. The announcement comes at a time when Apple is actively working to diversify its supply chain and shift part of its production away from China.

Trump’s Remarks and Their Timing

During the business summit in Doha, Trump revealed that he had urged Apple CEO Tim Cook to reconsider the company’s manufacturing strategy in India. "You are building all over in India. I do not want you building in India," Trump stated, underscoring his stance on domestic manufacturing. Cook, who was also present in Qatar for business discussions, has been central to Apple’s global diversification strategy, which aims to reduce reliance on a single geography for production.

Trump’s comments coincide with ongoing negotiations for a bilateral trade agreement (BTA) between India and the United States. They also come amid a fragile trade truce between the US and China—two major players in global commerce. This geopolitical backdrop adds complexity to Apple’s production decisions and has raised questions about the feasibility of such shifts in supply chains.

India’s Growing Role in Apple’s Supply Chain

India has emerged as a key hub in Apple’s manufacturing ecosystem, producing over 40 million iPhones annually. In 2024 alone, the company assembled iPhones worth more than $22 billion in the country, with production primarily handled by major players like Foxconn, Pegatron, and Tata Group’s Wistron facilities in Tamil Nadu and Karnataka. These assembly lines represent a significant step in Apple’s efforts to create a geographically diverse supply chain.

Apple’s decision to expand manufacturing in India has been driven by a combination of factors, including the need to mitigate risks from Covid-related disruptions in China and to leverage India’s growing capabilities in high-tech assembly. According to Tim Cook, a majority of iPhones sold in the US during the June quarter were expected to originate from India, with other Apple products sourced from Vietnam. Despite this, China continues to dominate Apple’s production for markets outside the United States.

Responses From Indian Officials and Analysts

Indian government officials appeared unfazed by Trump’s remarks, emphasizing that the country’s manufacturing ecosystem is built to attract global companies like Apple. A senior commerce ministry official noted that companies evaluate their manufacturing locations based on competitiveness and long-term value. “We have created an ecosystem suitable for sophisticated assembly lines. If a company sees value here, they will continue to invest,” the official stated.

Analysts also downplayed the immediate impact of Trump’s comments, pointing out the complexities involved in relocating global supply chains. Tarun Pathak, a research director at Counterpoint Research, highlighted that such transitions require years of planning and execution. “Global supply chains are not built—or moved—overnight. The electronics industry is gradually adapting and establishing its role in global value chains,” Pathak explained.

Trump’s Broader Push for Domestic Manufacturing

Trump’s critique of Apple’s India plans aligns with his broader push for American companies to prioritize domestic production. In 2024, Apple announced a $500 billion investment to construct an advanced server manufacturing facility in Houston, Texas. However, the company has yet to manufacture iPhones in the US, with its primary focus remaining on overseas production hubs in China, Vietnam, and India.

While Apple’s global operations are designed to ensure efficiency and cost-effectiveness, the push for onshoring production in the US could present challenges. A senior Indian government official noted that decisions regarding supply chains are not made in isolation and impact thousands of suppliers globally. “It’s not just about the company; it’s about the entire ecosystem of suppliers,” the official said.

Looking Ahead

Despite Trump’s opposition, Apple is unlikely to shift its manufacturing plans in the short term. The scale and complexity of Apple’s supply chain make abrupt changes impractical. For now, India remains a critical part of Apple’s strategy to diversify its production base and reduce dependency on China. Meanwhile, the geopolitical and economic interplay between India, the US, and China will continue to shape the future of global manufacturing.

Apple’s manufacturing journey in India represents a broader shift in global trade dynamics, where companies are seeking to balance efficiency, cost, and geopolitical considerations. As supply chains evolve, India’s role as a manufacturing hub is expected to grow, even as global pressures add layers of complexity to the decision-making process.