Apple is expanding its production in India. Can it avoid Trump’s tariffs?

Apple is expanding its iPhone supply chain to India. The new model released on February 19 is also expected to be produced in India. Although India is considering cultivating India into a global export base, there is a risk that the Trump administration will raise tariffs if India continues to adopt protectionist trade policies. India also has problems with electricity and technology shortages, and it may take a long time for Apple to get rid of its dependence on China.

The Indian economic media “Economic Times” reported on February 19 that Apple’s new product iPhone 16e released on the same day will also be produced in India. It is reported that all five models of the latest 16 series, including high-end models, will be assembled in India.

Apple develops and designs itself, and outsources production to external companies. Most of the iPhones sold in the United States are produced in China, but China’s supply chain was hit by the new crown epidemic and was in short supply, so Apple has been promoting the diversification of production bases.

One of the countries in the “post-China” era is India. Taiwan’s Hon Hai Precision Industry, a major supplier, is assembling iPhones at a factory in southern India. Apple has strengthened its system in both production and sales. Analysts estimate that the proportion of iPhones produced in India is currently around 15%, and will increase to 25% by 2027.

Cheap models such as the iPhone 16e and iPhone SE mostly use parts from older models. The iPhone 16e is believed to continue to use the shell of the iPhone 14 released in 2022.

Due to Trump’s tariffs, the importance of decentralized production sites is increasing. Apple officials said, “Under the Trump administration, it is impossible to predict which country is safer,” and the outlook for tariff policies is difficult to predict.

The situation in India is not optimistic either. India has always pursued a protectionist trade policy and maintained high tariffs on imported passenger cars, which may become a fuse for trade negotiations with the United States.

Japanese supply chain is stepping up reconstruction

As Apple, the world’s largest buyer in the field of semiconductors and electronic components, moves its production base, Japanese suppliers are also forced to rebuild their supply system.

TDK, which holds more than half of the global market share in the field of smartphone batteries, will start a new factory in the suburbs of New Delhi, India in 2025. Producing large-capacity batteries in India to cope with the increased power consumption as the iPhone strengthens its AI functions. TDK will transfer part of its high-performance battery production, which is centered in China, to India in order to meet customer requirements.

Japan’s major printed circuit board company Meiko Electronics will increase its production capacity in Vietnam. In addition to Japan, Meiko Electronics has two production bases in China and three production bases in Vietnam. It is currently building new plants at two bases in Vietnam, and is optimistic about increasing supply to Samsung Electronics and Apple in South Korea, which will increase production capacity outside of China.