Many believe that if the U.S. places a high import tax, known as a tariff, on iPhones made in India, prices will rise. But according to a new report from the Global Trade Research Initiative (GTRI), this is not the case. Even with a 25% tariff, producing iPhones in India is still far more affordable than manufacturing them in the United States.
Former U.S. President Donald Trump recently warned that if Apple continues making iPhones in India, he would introduce a 25% tax. He argued this would encourage companies to bring jobs back to America. The actual numbers, however, present a different image.
India’s Price Edge Revealed by GTRI Study
The GTRI report explains how a $1,000 iPhone is built using parts and services from many countries. Apple itself takes the biggest share, about $450, for designing, branding, and software development. China and India only make around $30 per device when it comes to final assembly.
So, even if a 25% tariff is added, the total cost remains lower than making the iPhone entirely in the U.S.
Global Production Chain Helps Apple Stay Profitable
Building an iPhone isn’t done in just one place. Instead, it involves over a dozen countries. American companies like Qualcomm and Broadcom add $80 worth of components. Taiwan provides $150 in chip manufacturing. South Korea supplies screens and memory chips valued at $90, while Japan contributes $85 in camera components. Other countries, like Germany, Malaysia, and Vietnam, provide smaller parts totaling about $45.
This worldwide chain lowers costs, spreads work, and keeps Apple’s profits steady. Changing it would be difficult, expensive, or both.
Wage Differences Make India a Better Option
One major reason India remains cost-efficient is labor. An assembly worker in India earns around $230 a month, while someone doing the same job in California could earn about $2,900 monthly. That’s over 13 times more.
An iPhone would cost roughly $390 in the United States, but Apple only charges $30 to assemble one in India.
Tariffs Won’t Bring iPhone Manufacturing Back to the U.S.
Unless they raise the selling price, which might hurt sales, Apple’s profit per iPhone would drop from $450 to just $60 if they moved their production to the United States.
So, despite the threat of new tariffs, India stays the smarter, cheaper, and more practical place for iPhone assembly. And with government support like production-linked incentives, India’s role in Apple’s supply chain looks secure.
