Then, in 2016, after years of negotiations, the relationship between Apple and India suddenly thawed. India relaxed its rules for foreign companies, giving the green light for Apple to finally move in with an online store, retail outlets, and manufacturing plants.
The love affair was on.
But now, President Donald Trump, in his effort to return manufacturing to the U.S. by hiking tariffs, is trying to break up the happy couple. Annoyed by Apple shifting some of its production from China to India, rather than to the U.S., he said on Thursday that he had scolded Apple CEO Tim Cook about it.
“I said to Tim, I said, ‘Tim, we treated you really good, we put up with all the plants that you built in China for years, now you got to build us,” Trump recounted. “We’re not interested in you building in India, India can take care of themselves.”
Apple now finds itself caught in between two conflicting imperatives in India. By expanding production there, the company is racing to reduce its dependence on China while still keeping costs low. But in doing so, Apple is also making itself a target for Trump. Trying to balance the internal need for cheap labor and making Trump happy will require delicate diplomacy, if it’s possible at all.
Over the years, Apple has sunk a huge amount of time, effort, and money to achieve what it has in India. The country has become a critical manufacturing hub for the company and, potentially, a major source of sales growth as millions of Indians climb the economic ladder.
There’s no disputing that Apple waited an eternity, in business terms, to create a major presence in India, the world’s most populous country. The company’s online store went live only in 2020. And In 2023, it cut the ribbon on its first brick and mortar outlet, in Mumbai, followed a couple of days later in New Delhi. The openings came a full two decades after Apple had built its first overseas store in Japan. The new outlets in India were such a big deal that Cook traveled there to mark the occasion. Apple plans to open more stores in India later this year.
In terms of manufacturing, India is also growing in importance for Apple. Trump’s trade war has made it even more so.
“Cook has navigated this unprecedented supply chain situation in a ‘hall of fame moment’ that will be part of his legacy,” Wedbush Securities analyst Dan Ives roared approvingly in a research note on Friday. If needed by the Fall, Ives said, Apple could ramp up iPhone production in India by up to 65%.
(Whether all of the rejiggering will turn out to be necessary, however, is unclear as Trump has since put his tariffs in flux by delaying some of them, starting negotiations on others, and contemplating a separate levy on electronics.)
If Apple was able to be nimble in the face of Trump’s “liberation day,” it’s because the company has been gradually shifting some of its product assembly to India, along with Vietnam, for several years. Executives had realized the company was overly dependent on China and needed to hedge its bets.
Like in most countries, Apple uses third-parties in India, such as Foxconn and Tata Group, to produce its devices. This week, for example, Indian officials said a $435 million semiconductor plant proposed by a joint venture between Taiwan-based Foxconn and India’s HCL had been approved.
Manufacturing in India, however, has its downsides. Supplies and infrastructure are often more expensive than in China. Apple did not respond to a request for comment.
In attacking Apple over its expanding India manufacturing, Trump is also indirectly targeting Indian Prime Minister Narendra Modi. Modi has made increasing tech manufacturing a major pillar of his administration and Apple is one of his biggest wins.
“Symbolically, it’s very important for India, especially vis à vis China,” Saikat Chaudhuri, a professor of business and engineering at University of California at Berkeley.
Chaudhuri called Trump’s latest comments about Apple and India “a lot of rhetoric” that will ultimately be resolved without Apple having to move some iPhone production from India to the U.S. Doing so would be impractical, Chaudhuri said, because manufacturing the devices in the U.S. would make them prohibitively expensive. It would also take years to get a plant up and running. While Trump wants to create jobs, he also wants to avoid interrupting the flow of commerce, Chaudhuri said, adding “I think it’s in everyone’s interest to strike a deal.”
