Apple taps Indian production for iPhone to ease pressure from soaring U.S. tariffs

As trade tensions escalate, Apple is quietly redirecting a growing portion of its iPhone supply from India to the U.S. in a bid to offset rising costs triggered by the latest wave of tariffs reported by The Wall Street Journal. While the company has long viewed India as a secondary production base, it’s now fast becoming a central player in Apple’s short-term strategy to navigate mounting trade barriers.

Sources familiar with Apple’s internal planning say the company is responding to newly imposed tariffs by U.S. President Donald Trump that heavily target electronics from China, Vietnam, and Thailand—countries that have been pillars of Apple’s supply network. The new rates, which vary by country, present significant cost implications, especially as Apple prepares for the next iPhone cycle.

Although India is not spared from tariffs, the 26% rate is far less severe than the 54% imposed on Chinese goods. That gives Apple an incentive to accelerate shipments from its growing Indian production line, which has matured significantly over the last few years. The company now expects to meet a large portion of U.S. iPhone demand using devices assembled in India—an unprecedented move that marks a shift in Apple’s global manufacturing playbook.

While this strategy provides temporary relief, sources say Apple is hesitant to commit to any dramatic overhaul of its supply chain. The unpredictability of the current trade environment, coupled with the complexity of Apple’s global logistics, makes long-term decisions risky. CEO Tim Cook has attempted to navigate these tensions before, securing exemptions during previous trade battles, but efforts to do the same this time have reportedly stalled.

Building iPhones in the U.S. remains an unlikely option due to the high cost of labor and a lack of skilled technicians for Apple’s advanced production needs. Despite announcing major investments in domestic infrastructure earlier this year, those initiatives focus on components and backend technologies rather than mass-market devices.

While Apple is expected to continue pushing suppliers to cut prices and may absorb some costs itself, analysts warn that a price increase for future products—including the iPhone 17—remains on the table. The company is also exploring expanded trade-in incentives and financing options to cushion the impact on consumers if prices rise.

Markets have responded sharply to the tariff news, with Apple stock experiencing double-digit losses over the past week. As the political and economic landscape continues to shift, Apple’s ability to stay agile will be critical in maintaining its position at the top of the global smartphone market.