Apple Shifts iPhone Production to India Amid $900 Million Tariff Hit

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Apple CEO Tim Cook announced a significant shift in the company’s supply chain during its quarterly earnings call, revealing that iPhones sold in the U.S. will soon be primarily manufactured in India. The move comes as the tech giant braces for an additional $900 million in costs this quarter due to escalating global tariffs.

“Assuming current tariff policies remain unchanged, we estimate a $900 million impact to our costs,” Cook said. This financial strain stems largely from the Trump administration’s aggressive tariff policy, which includes a staggering 145% levy on Chinese imports. While smartphones have avoided the harshest duties, Apple still faces a minimum 20% levy on Chinese-made products.

For years, around 90% of Apple’s iPhones were made in China, but the company has been gradually diversifying. Cook now expects India to become the origin for most U.S.-bound iPhones. Vietnam will also play a major role, becoming the production base for nearly all iPads, Macs, Apple Watches, and AirPods sold in the U.S.

Despite supply chain challenges, Apple reported strong earnings. Revenue rose 5% year-over-year to $95.4 billion in Q1 2025, with iPhone sales growing 2% to $46.8 billion. However, sales in Greater China dipped 2% amid stiff competition from local brands.

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While the Trump administration pushes for U.S.-based iPhone production, experts like Wedbush’s Dan Ives warn that it could drive prices to $3,500 per device. Apple’s recent $500 billion investment, often hyped by Trump, is focused on AI infrastructure and training—not iPhone manufacturing.

Cook emphasized the need for a diversified supply chain, stating, “What we learned some time ago was that having everything in one location had too much risk with it.”

The shift underlines Apple’s strategic pivot to navigate geopolitical tensions while maintaining global competitiveness.