Donald Trump said ‘don't build in India,’ but Apple's $17.4B iPhone export surge shows it’s not going anywhere

The pronouncements from the highest levels of government can often send ripples through the complex world of global commerce. A notable instance occurred when President Donald Trump, at an event with business leaders in Qatar spoke of a conversation with Apple CEO Tim Cook. “I said I don’t want you building in India,” Trump recounted. This assertion, made amidst discussions of trade negotiations with India, immediately begged a crucial question: how much of this reflects a tangible shift in Apple's manufacturing strategy, and how much of it is just “Trump Talk” aka political posturing?

The undeniable truth is that Apple is, in fact, significantly expanding its manufacturing footprint in India. This isn't a hypothetical scenario. It's a strategic shift driven by a number of factors, primarily the desire to diversify its supply chain away from an over-reliance on China amidst escalating trade tensions. India is no longer just a nascent location for Apple; it's rapidly becoming a crucial hub.

The global tech landscape is shifting, and India is at a pivotal point. India's manufacturing is surging. Apple, through Foxconn, Pegatron, and Tata Electronics, has been aggressively expanding production. India’s IT Minister recently revealed Apple exported a massive ₹1.5 lakh crore, or $17.4 billion, worth of iPhones in FY25. Local suppliers like Sunwoda, Foxlink, and Aequs are also stepping up, pushing local content in India-made iPhones to 20%. India is building a robust tech ecosystem, from chips to finished products. Apple's iPhone production in India hit a staggering $22 billion in 2024-25, a 60% surge in just one year. And the goal? To produce 25% of all iPhones globally in India by 2028. In March this year, Reuters had reported that Apple shipped around $2 billion worth of iPhones from India to the U.S., including $1.3 billion from Foxconn alone.

The goal to manufacture a majority of iPhones sold in the U.S. from Indian facilities by the end of 2026 is a testament to this commitment. This involves substantial investment from Apple and its manufacturing partners like Foxconn and Tata Group, building new facilities and scaling up existing ones. The Indian government's proactive approach, offering incentives and aiming to position the country as a global manufacturing power, further emphasises this shift.

The motivation for this sort of approach is clear: de-risking the supply chain. While President Trump's administration saw tariffs as a tool to bring manufacturing back to the US, these very tariffs, and the potential for their re-imposition or escalation, have actually prompted companies like Apple to explore alternative manufacturing locations outside of China. India, with its large labour pool and growing infrastructure, presents a viable alternative that offers some degree of insulation from US-China trade friction.

Now, let's turn to the prospect of Apple “upping their production in the United States,” as suggested by the President's account of his conversation with Tim Cook. While Apple does invest in the US (especially their recent $500 billion investment in the US over four years), its investments are primarily focused on areas like research and development, silicon design, artificial intelligence, and to a lesser extent, specialized manufacturing. The sheer scale and complexity of iPhone assembly, involving a massive network of suppliers providing millions of minute components, make a complete or even majority shift to the US a monumental challenge under current economic realities.

The most significant hurdle is cost. Manufacturing labour in the United States is substantially more expensive than in India or China. Estimates from financial analysts and industry experts consistently show that assembling an iPhone in the US would drastically increase its production cost, potentially leading to significantly higher retail prices for consumers. This cost disparity extends beyond labour to the entire supply chain ecosystem. The highly specialized and integrated network of component suppliers required for iPhone production is largely concentrated in Asia. Replicating this intricate web in the US would require colossal investment and years, if not decades, to develop.

Hypothetically speaking, shifting iPhone production to the US could raise manufacturing costs by 25%, mainly due to higher domestic labour costs, according to a Bank of America report. We also need to factor in that many iPhone components will be sourced from China and attract potential tariffs, which would only add to the costs.

Also, the sheer scale of iPhone production is a critical factor. Apple sells over 200 million iPhones annually. Meeting this global demand requires manufacturing facilities capable of churning out devices at an unprecedented pace and volume. While the US possesses advanced manufacturing capabilities in certain sectors, the infrastructure and workforce required for high-volume, low-margin consumer electronics assembly on the scale Apple needs are not currently in place.

While President Trump's assertion about Apple increasing production in the United States might point to Apple's broader investment plans in the US, equating those investments directly to a wholesale shift in iPhone manufacturing from India to the US doesn’t really align with current economic realities. It’s clear- Apple's strategy is one of diversification, adding India as a significant manufacturing hub alongside China and other locations like Vietnam, rather than a complete abandonment of one for the other.

In conclusion, President Trump's comments likely reflect a desire for more manufacturing to return to the US, a consistent theme of his administration's trade policy. However, the notion that Apple is poised to abandon its rapidly expanding iPhone production in India to significantly ramp up assembly in the United States appears to be more aspirational than factual, at least in the short to medium term. Apple's strategic shift towards India is a tangible and ongoing development driven by the practicalities of global supply chain management and a prudent way to mitigate risk. 

While Apple may continue to invest in the US economy in areas where it makes strategic sense, the complex culmination of costs, infrastructure, labour, and scale dictates that the "Made in USA" iPhone, in the volumes Apple requires, remains largely an aspiration rather than immediate reality. The story of where your iPhone is made is less about a simple binary choice and more about a complex, evolving global network, where India continues to play a vital role.