India now to become 'iPhone' Hub
In the midst of turmoil, the Indian economy is in a much better position than the growth rate of the global economy. Even the Indian economy is in a better position than America, the most powerful country in the world. Now India has started benefiting from the growing trade war between the US and China. To deal with tariff threats, many US companies are planning to shift their assembly units to India to reduce dependence on China. One such American company, tech giant Apple, has decided to increase its production in India rapidly.
Apple CEO Tim Cook has confirmed that most iPhones sold in the US during the June quarter will be made in India. Amid the ongoing tariff war, the company is taking a fresh look at its supply chain. He estimates that the cost of duty impact for the company will be around USD 900 million. "As far as the June quarter is concerned, we expect India to be the country of origin for most of the iPhones sold in the US. Similarly, almost all products sold in the US, such as iPads, Macs, Apple Watches and AirPods, will be originally from Vietnam. He also said China will remain the country of origin for most of the products sold outside the US. Since the time of Covid, Apple has been trying to reduce its dependence on China. It got further strength when Donald Trump, who won the presidential election, announced a huge tariff on China. If everything goes according to Apple, then it is expected that by the end of 2026, Apple will shift a large part of its manufacturing to India. After this, more than 60 million iPhones will be made annually in India. This will be double the current number. Currently, China dominates iPhone manufacturing.
According to IDC, China accounted for about 28 percent of the company's global iPhone shipments in 2024. By shifting iPhone manufacturing from China to India, Apple will be able to protect itself and its customers from the burden of tariffs. After this, your friends living in the US may start ordering an iPhone for you. It has also been claimed that Apple is not taking this decision just because of the tariff. Actually, Apple also has to increase its production. In such a situation, India can become Apple's new factory. While the growth of the Indian economy was stabilising at a moderate rate, changes in US trade policy created huge uncertainty at the global level. However, various estimates, including that of the International Monetary Fund, suggest that it will have limited impact on India. In such a situation, it is difficult to say anything for sure at this time.
An uncertain environment often discourages companies from investing and this is happening all over the world. However, the situation may change for India in the near future for two reasons. Firstly, India is negotiating a bilateral trade deal with the US and reports suggest that everything is going in the right direction. A breakthrough would make things clearer for businesses. Second, many multinational companies want to distance themselves from China in terms of business. India can present itself as an attractive alternative. Apple wants to shift the entire production of its Apple smartphones exported to the US to India.
Taking advantage of such opportunities will give impetus to investment, employment and growth. While there is no scope for additional fiscal support on the domestic policy front, the expected cut in interest rates could provide monetary policy support. However, the Reserve Bank will have to carefully consider its policy options. Additional adjustments to help growth can lead to unintended consequences. Regardless of what happens, companies operate more than the demand conditions. Weakness in private investment over the years has been a weak link in the country's growth story. An uncertain economic environment could lead to further delays in transition. India is leaving no stone unturned to leave behind China in smartphone manufacturing. Apple's talk is no longer hidden from anyone. The world has come to know that Apple's phones are being made indiscriminately in India. Foxconn, the leading iPhone maker, has started work on setting up a new plant in Uttar Pradesh. Apple's other manufacturers are also increasing their production in India, which is hurting China strongly. This is the reason why Apple's position has gone to number five in China. Apple's shipments in China have decreased for the seventh consecutive quarter.