Apple is preparing to make a major change to its global supply chain. By the end of 2026, the company plans to shift the assembly of nearly all iPhones sold in the United States out of China and into India. This marks one of the most significant changes in Apple’s manufacturing strategy in nearly two decades and highlights the growing impact of international trade tensions on global businesses.
Currently, 80 percent of the iPhones sold in the United States are assembled in China. Moving production to India will more than double Apple’s current output from that country. The decision is largely a response to the escalating trade war between the United States and China and the fear of steep tariffs on Chinese-made goods.
The Financial Times was the first to report on Apple’s new plans, and according to Reuters, Apple is already in active discussions with major partners in India, including Foxconn and Tata Group, to make the transition happen.
Trade Tensions Drive the Shift
The United States, under President Donald Trump, has imposed heavy tariffs on goods imported from China, with some products facing rates as high as 245 percent. Although smartphones have been temporarily exempt, Commerce Secretary Howard Lutnick recently warned that this protection may soon end. This looming threat is pushing Apple to move more aggressively.
During an interview with Al Jazeera, Daniel Newman, CEO of the research firm Futurum Group, said, “We believe this will be an important move for Apple to maintain its growth and momentum.” He added, “We’re seeing in real time how a company with these resources is moving at a relatively light speed to address the tariff risk.”
Apple’s efforts are not new. During the first Trump administration, Apple began expanding its presence in India to avoid earlier rounds of tariffs. In March 2025 alone, Apple shipped $2 billion worth of iPhones from India to the United States, accounting for about 600 tonnes of cargo, which was a record for both Foxconn and Tata.
Building a New Manufacturing Hub in India
Apple is working closely with its manufacturing partners to expand operations in India. A new Foxconn facility in Bengaluru is expected to open by the end of the month. According to CNBC-TV18, the new facility will help boost production to meet the growing demand.
Indian Prime Minister Narendra Modi has made a strong push to position India as a global manufacturing center. Earlier this year, India removed import taxes on some components needed for mobile phone production. Babak Hafezi, CEO of Hafezi Capital, explained, “If you’re charging import tax for intermediary goods, then you cannot actually be competitive versus somebody who does not.” He continued, “Their objective is to be as competitive as they can be to become the leading manufacturing hub.”
Apple assembled about $22 billion worth of iPhones in India during the 12-month period ending in March 2025, which was a 60 percent increase from the previous year, according to Bloomberg. However, even with this growth, India still only accounts for 20 percent of the world’s iPhone production.
In 2024, Apple built 12 million iPhones in India. This year, the company hopes to build between 25 million and 30 million units there. To meet the goal of moving all U.S. iPhone assembly to India by 2026, Apple will have to continue scaling up production at a very fast pace.
The Challenges Apple Faces
The move to India will not be without significant challenges. Manufacturing an iPhone in India is 5 to 8 percent more expensive than doing so in China, according to Reuters. Analyst Dan Ives from Wedbush Securities told Al Jazeera, “India will help, but it’s not moving the needle on China’s dependence for Apple. It will take years to make this move, as Apple is caught in the tariff storm.”
The costs could be enormous. Ives estimates that shifting the assembly of iPhones for the U.S. market to India could cost Apple between $30 billion and $40 billion.
Infrastructure in India is another concern. “They have massive amounts of infrastructure problems in terms of traffic and mobility,” Hafezi explained. “You need secure, continuous, and productive infrastructure to maximise manufacturing as best as you can and be globally competitive.”
There have also been reports of Chinese interference. According to the tech outlet The Information, Chinese authorities have started creating roadblocks for Apple suppliers who are trying to move their operations to India. Equipment shipments have been delayed or blocked without explanation. In one case, Foxconn had an export application delayed for up to four months.
How China Is Reacting
China’s government has largely remained silent about Apple’s plans, but actions taken against equipment shipments suggest growing discomfort. Delaying critical machinery could slow down Apple’s relocation efforts and send a signal to other companies considering a similar move.
At the same time, China has denied that it is engaging in new trade negotiations with the United States, even as President Trump recently said he had spoken to Chinese President Xi Jinping. Trump’s administration continues to push for a better deal, but no official talks have been confirmed by Beijing.
Although Apple still relies heavily on China for components, moving assembly to India marks an important step toward reducing its dependence on Chinese manufacturing. The timing of this decision is critical, as Apple prepares to release its next earnings report.
So far in 2025, Apple’s stock has been volatile. Although it gained 23.1 percent over the past year, it is down 16.9 percent since the start of the year. Analysts and investors are watching closely to see how the tariff situation and supply chain moves will affect Apple’s future profits.
Apple’s leadership, including CEO Tim Cook, has been in regular contact with President Trump’s administration. The company has not yet issued an official statement on the new tariffs or the costs associated with the production move.
Still, the larger shift is clear. As Newman explained, “We believe this will be an important move for Apple to maintain its growth and momentum.” Apple’s decision to speed up its exit from China shows that even the world’s largest companies are being forced to rethink their global strategies in a time of rising trade barriers and political uncertainty.
