More production in India: How Apple gets around existing 145 percent tariffs
The Trump administration has suspended high tariffs on certain products from China. But not all of them. Apple is responding.
Production in an Indian factory (symbolic image).
(Image: PradeepGaurs / Shutterstock)
In addition to significantly increasing its iPhone production in India, Apple also wants to produce more accessories on the subcontinent and open new factories for this purpose. The aim is to circumvent the high US punitive tariffs, which currently stand at 145% on goods manufactured in China, depending on the product. In April, the Trump administration initially suspended the high tariffs on some electronic products for 90 days. However, this does not apply to all Apple devices, and the company fears that the suspension may not be permanent. In addition, the punitive tariffs on Chinese products – most Apple products still come from the People's Republic – already stand at 20 percent, which was set as part of the so-called Fentanyl levy. Apple had made provisions of 900 million US dollars for this in this quarter.
AirPods soon to be "more" made in India
The Economic Times newspaper, which is published in Mumba, is now reporting that more AirPods will soon be manufactured in India. Apple has concluded a new agreement with the supplier Jabil. A second factory in the state of Tamil Nadu will produce housings for the earbuds. More housings also mean more fully assembled AirPods from India. There will be a "significant increase" in production, according to informed sources. It is part of Apple's strategy to further diversify its supply chain, particularly in the context of the trade dispute between Beijing and Washington.
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Jabil currently manufactures the AirPods cases in Pune. An existing factory in Tamil Nadu could also start work quickly. Planning is expected to be completed in June or July. Pre-suppliers such as Jabil are extremely important for Apple's overall production in India.
Entry-level iPhones including pre-production from the subcontinent
Currently, many parts for iPhone production, for example, still come from China and have to be exported and imported over a long period of time. In addition, the Chinese government and local customs are causing difficulties, for example with the delivery of machine tools. If Apple were to succeed in establishing the supply chain as broadly as possible directly in India, this would make production easier. However, this is only likely to succeed quickly for comparatively simple components, including plastic production.
Currently, 20 percent of all iPhones come from India. By the end of next year, almost all Apple smartphones destined for the USA is said to come from the subcontinent. With the iPhone 17, at least the cheaper models could be developed entirely in India for the first time, including the pre-production necessary for mass production. This is currently still carried out in China and is a key step in the production of the devices.
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