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Apple is in the midst of one of the biggest changes to its production strategy. The technology giant aims to significantly reduce its dependence on China. By the end of 2026, all iPhones destined for the US market will come from India. The move comes as no surprise, but the speed with which Apple is planning this transition demonstrates the seriousness of the situation.
Rising trade tensions between the US and China are putting pressure on Apple. New tariffs are hitting the company hard, and the political tone is becoming more harsh. To minimize risks, Apple plans to restructure its supply chain, focusing on India.
Apple relies on India as a new production base
Currently, the majority of iPhones are produced in China. Major partners like Foxconn produce large quantities there. The US market alone accounts for approximately 28 percent of Apple's global iPhone shipments. According to International Data Corporation, this amounted to approximately 232.1 million iPhones in 2024. To fully relocate production to India by 2026, Apple would have to double its capacity there. The company has been building factories in India for some time now, together with partners like Tata Electronics and Foxconn. This massively accelerates the gradual diversification that Apple initiated several years ago.
Trade dispute between the USA and China as a trigger
A key reason for the move is the new US tariffs on Chinese imports, which were introduced under President Trump. The duties amount to up to 145 percent. These tariffs have had a huge impact on Apple: The company's market value fell by approximately $700 billion. Apple reacted quickly and shipped finished iPhones from India to the US to avoid the additional costs. At the same time, CEO Tim Cook held talks with US government officials, including Commerce Secretary Howard Lutnick. Cook secured a temporary exemption from the tariffs for products such as iPhones, Macs, Apple Watches, and iPads. However, this exemption is not guaranteed to be permanent. Trump clarified that "no one is off the hook" and that electronics companies could end up in a different "tariff pot" if the government reassesses the entire electronics chain (via Financial Times).
Cooperation with India as a strategic advantage
India is becoming increasingly important for Apple, not only as a production location but also politically. India and the US are currently working on a bilateral trade agreement. If the negotiations are successful, even better conditions could arise for Apple. Despite the planned relocation of production, one problem remains: many iPhone components continue to come from China. A complete decoupling is not possible in the short term. Relocating iPhone production to the US itself is also not currently under discussion, although Apple has announced investments of $500 billion in the United States.
Apple faces an important stress test
Apple will present its quarterly results next week. Analysts and investors will be paying close attention to how the new tariffs and the shift in supply chain will impact its business figures. The stakes are high for Apple: The success or failure of this strategy will determine how well the company can hedge against future political and economic uncertainties. (Image: Shutterstock / Aanimesh)
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