In his tweet on Friday on his Truth Social platform, Trump said, “I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America to be manufactured and built in the United States, not in India or anywhere else. If that is not the case, a tariff of at least 25% must be paid by Apple to the US. Thank you for your attention to this matter!” 

The US president also reignited a fresh trade war with a threat to impose 50% higher tariffs on imports from the European Union (EU).

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Two Indian officials familiar with the US-India trade talks said Trump’s comments won’t impact the trade negotiations. “The tweet does not change our negotiating posture,” the first official said on the condition of anonymity. “However, if Apple alters its sourcing and production decisions based on this pressure, it may affect India’s electronics exports.”

The second official maintained that Apple Inc. will continue to base its decisions on commercial considerations. “At the end of the day, high-end phone manufacturers like Apple will act according to what makes business sense,” the official said, pointing to India’s cost advantages, supply chain depth, and growing domestic market.

Meanwhile, the Indian trade delegation remains focused on the ongoing BTA discussions. The delegation is led by Union commerce minister Piyush Goyal, who is accompanied by chief negotiator Rajesh Agarwal, who is additional secretary, ministry of commerce. According to the first official cited above, the Indian team is scheduled to return home on Sunday night.

For the BTA, India has reportedly offered a zero-tariff structure for certain US products and is likely to propose further changes, including tariff reductions and easing compliance requirements for US firms planning to enter or already doing business in India.

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“The timing of the tweet is questionable,” said an industry executive, who refused to be identified. “When the Indian team is in negotiations with US counterparts and the Union commerce minister is leading from the front to seal the deal—possibly before 8 July—such a statement from the US leadership creates doubts.” 

Besides, Apple, a key player in the production-linked incentive (PLI) scheme, is significantly contributing to the growth of India’s electronics exports. In FY25, India’s electronics exports to the US rose to $14.64 billion from $5.76 billion in FY23, as per commerce ministry data. In FY18, the exports were at a mere $986.22 million. To be sure, iPhone exports increased significantly from 2020 onwards.

Queries emailed to Apple Inc. and the commerce ministry remained unanswered till press time.

Earlier, on 15 May, Trump had asked Apple’s chief executive officer not to manufacture in India. “I had a little problem with Tim Cook yesterday,” Trump said of his conversation with Cook in Qatar, where he was on a state visit last week. “He is building all over India. I don’t want you building in India. India can take care of itself.” 

On Thursday, Apple supplier Foxconn announced a fresh investment of $1.5 billion to expand iPhone production in India. The funds, routed through its Singapore-based arm, are being directed into Yuzhan Technology India—a iPhone component manufacturer based in Tamil Nadu—as part of Foxconn’s broader effort to scale up its Indian operations.

The other view

However, contrary to concerns that India would lose out, the Global Trade Research Institute (GTRI), a trade think tank, in its report released last Friday, suggested that the exit of iPhone assembly might actually benefit the country.

At present, India earns less than $30 per iPhone, a large portion of which is effectively returned to Apple through production-linked incentives, it said.

“In order to protect Apple, New Delhi is slashing import duties on crucial smartphone components—like displays, chipsets, and batteries, a move that undermines Indian companies trying to build a local supply chain,” said Ajay Srivastava, GTRI co-founder.

In terms of profitability, a $1,000 iPhone is the result of a globally distributed value chain, with Apple capturing around $450 through design, software and brand value, as per the GTRI report. 

US component suppliers like Qualcomm and Broadcom contribute another $80, while Taiwan earns $150 for chip fabrication. South Korea and Japan add $90 and $85, respectively, through OLED screens, memory and camera systems. Germany, Vietnam and Malaysia account for about $45 through smaller parts.

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Yet, despite dominating final assembly, China and India each receive just $30 per device—less than 3% of its retail price. This stage may be low in value addition, but it’s rich in job creation.

Currently, some 300,000 workers in China and 60,000 in India are employed on iPhone assembly lines. The GTRI report said that Trump wants to relocate this labour-intensive segment to the US—not because it’s cutting-edge, but because it offers large-scale employment.

However, the shift would come at a price. In India, labour costs for assembly hover around $230 per month. In the US, the same work would cost upwards of $2,900 per month under state minimum wage laws—a 13-fold increase. 

Consequently, the cost of assembling each iPhone would rise from $30 to about $390, slashing Apple’s per-device profit from $450 to about $60 unless offset through pricing adjustments, the report said.