Will Apple moving iPhone production to the U.S. actually benefit India? An expert explains why

Will Apple shifting iPhone manufacturing from India to US help Indian manufacturing? Yes, in the medium term, believes Ajay Srivastava, founder of Delhi based think tank Global Trade Research Initiative (GTRI).

“Today, India earns just $30 per iPhone, much of which is given back to Apple as subsidy under the PLI scheme. At the same time, New Delhi is cutting tariffs on key smartphone components at the request of big firms like Apple, which hurts domestic firms trying to build a local component ecosystem”, says Srivastava. According to him, if Apple’s assembly moves out, India will be forced to stop propping up shallow assembly lines and instead invest in deeper manufacturing—chips, displays, batteries, and beyond.

“It will also cut US trade deficit with India, a major concern for Trump. For every iPhone sold at around $1,000 in the US, India's share is less than $30. Yet, in trade data, the full $ 7 billion export value adds to the US trade deficit”, Srivastava says.

An analysis by GTRI shows that each $1000 iPhone carries the imprint of at least a dozen countries. “Apple, through its software, design, and brand, claims the lion’s share of the value—about $450 per device. U.S. component makers such as Qualcomm and Broadcom add another $80. Taiwan earns $150 for chip manufacturing, South Korea adds $90 for OLED screens and memory chips, and Japan contributes $85, mainly via camera systems. Other countries like Germany, Vietnam, and Malaysia account for a modest $45 through smaller parts. And then there’s China and India. Despite dominating iPhone assembly, both countries receive only about $30 per device, less than 3% of its retail price”, the analysis shows.

Incidentally, this final stage of production, while low in value, is high in employment. Around 300,000 workers in China and 60,000 in India work in iPhone assembly lines. This, according to Srivastava, is precisely the segment of the supply chain Trump wants to bring back to the U.S.—not because it’s high-tech, but because it delivers jobs.

At a business summit in Doha on May 15, U.S. President Donald Trump revealed that he had asked Apple CEO Tim Cook to halt the expansion of iPhone assembly operations in India. “I don’t want you building in India... They can take care of themselves,” Trump said, urging Cook to bring production home.

India will lose a lot of low value jobs that Apple creates today, but if that helps in building an ecosystem that will bring in self reliance in mobile manufacturing, eventually even these low value jobs could be back in the medium term.