In a surprising development, U.S. President Donald Trump has publicly stated that he urged Apple CEO Tim Cook to abandon plans for expanding iPhone manufacturing in India, pushing instead for increased production in the United States. The remarks, made during a business event in Qatar on Thursday, come amid reports that Apple was planning to shift the bulk of its U.S.-bound iPhone production to India by the end of 2026. This news has raised questions about the future of Apple’s manufacturing strategy, the Indian smartphone market, and the broader economic implications for both India and the U.S.
Trump’s Statement and Apple’s Plans
Speaking at the event, Trump said, “I had a little problem with Tim Cook yesterday. He is building all over India. I don’t want you building in India,” adding that Apple should be “upping their production in the United States.” The comments follow reports from outlets like the Financial Times and Reuters, which indicated Apple was in talks with its Indian manufacturing partners, Foxconn and Tata Electronics, to produce most iPhones sold in the U.S. market in India by 2026, doubling its current output in the country.
However, Apple has not officially confirmed any change to its plans, and Indian government sources told CNBC-TV18 that Apple has assured the government of its commitment to making India a major manufacturing hub. This discrepancy leaves the situation uncertain, as Trump’s remarks may reflect political posturing rather than a finalized decision by Apple.
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iPhone Sales and Customer Base in India
India is a rapidly growing market for Apple, driven by its expanding middle class and increasing demand for premium smartphones. In fiscal year 2024, Apple’s smartphone sales in India reached $8 billion, despite holding only an 8% market share. Approximately 12 to 13 million iPhones were sold in India last year, out of the 40 to 43 million produced in the country. This indicates a significant customer base, with millions of Indian consumers opting for iPhones, particularly aspirational buyers in urban areas. Apple’s market share remains smaller than Android’s dominant 95% in India, but its sales surged by 29% in the March 2025 quarter, fueled by the iPhone 16 series and the introduction of Apple Intelligence features.
Apple’s Manufacturing Footprint in India
Apple has been steadily increasing iPhone production in India as part of its strategy to diversify its supply chain away from China, prompted by U.S.-China trade tensions and geopolitical risks. In the 12 months ending March 2025, Apple produced iPhones worth $22 billion in India, a 60% increase from the previous year, accounting for one in five iPhones globally.
Apple’s manufacturing operations in India are primarily handled by three partners: Foxconn, Tata Electronics, and Pegatron. The key factories are located in:
- Tamil Nadu: Foxconn operates a major facility in Sriperumbudur, assembling a range of iPhone models, including the premium iPhone 16 Pro. Tata Electronics recently began production at a new plant in Hosur, focusing on older iPhone models.
- Karnataka: Tata Electronics acquired Wistron’s iPhone assembly plant in Bengaluru, which manufactures models like the iPhone 12 and iPhone 14.
- Hyderabad: Foxconn has a facility primarily focused on AirPods but is expanding its role in iPhone production.
In March 2025 alone, Apple exported $2 billion worth of iPhones (approximately 600 tonnes or 1.5 million units) from India to the U.S., with Foxconn contributing $1.3 billion and Tata the remainder.
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Future Factory Plans
Apple had ambitious plans to expand its manufacturing capacity in India, aiming to produce over 60 million iPhones annually by 2026 to meet U.S. demand, effectively doubling its current output. Key future projects included:
- Bengaluru, Karnataka: Foxconn is constructing a $2.6 billion plant, expected to be operational by December 2027, with the capacity to create up to 50,000 jobs and produce 25–30 million iPhones annually.
- Uttar Pradesh: Foxconn is in talks to acquire 300 acres near Greater Noida for a new manufacturing facility, marking its first solo project in northern India.
- Hosur, Tamil Nadu: Tata Electronics is expanding its existing facility to include newer iPhone models, potentially increasing output significantly.
These plans were designed to make India a central hub for Apple’s global iPhone production, leveraging India’s lower labor costs, skilled workforce, and government incentives like the $2.7 billion electronics manufacturing subsidies under Prime Minister Narendra Modi’s “Make in India” initiative.
The Indian Smartphone Market’s Worth
The Indian smartphone market is one of the largest and fastest-growing globally, with an estimated value of over ₹2.5 lakh crore (approximately $30 billion) in 2024, based on industry reports and the average selling price of smartphones. With over 700 million smartphone users and an average selling price of $224 (₹18,700), the market is driven by a young population and rising disposable incomes. Apple’s $8 billion in sales represents a significant but still small slice of this market, underscoring the potential for growth if Apple continues to invest in local production and affordability strategies like financing and trade-in programs.
Potential Impacts of Halting Factory Expansion in India
If Apple were to halt its factory expansion in India as a result of Trump’s request, the implications would be far-reaching for India, the U.S., and Apple itself.
Impact on India
- Economic Loss: Apple’s $22 billion in iPhone production and ₹1.5 lakh crore in exports in FY25 have been a boon for India’s electronics sector. Halting expansion could jeopardize millions of jobs, as factories like Foxconn’s Bengaluru plant were expected to employ up to 50,000 workers. It would also undermine India’s ambition to become a global manufacturing hub under the “Make in India” initiative.
- Reduced Exports: India’s role as an export hub for U.S.-bound iPhones would diminish, impacting foreign exchange earnings and trade negotiations. India’s recent offer to eliminate tariffs on U.S. goods, as mentioned by Trump, could lose leverage if Apple’s investments stall.
- Market Growth Stagnation: Local production helps Apple avoid import duties, keeping iPhone prices competitive. A halt could slow Apple’s market share growth, limiting access to India’s 1.4 billion consumers and potentially ceding ground to Android competitors.
Impact on America
- Higher iPhone Prices: Manufacturing iPhones in the U.S. is costly due to higher labor costs, lack of infrastructure, and limited automation expertise. Analysts estimate that domestic production could increase iPhone prices by up to 43%, with a base iPhone 16 potentially rising from $799 to $1,142. This could dampen demand in Apple’s largest market, where 60 million iPhones are sold annually.
- Job Creation Challenges: While Trump’s push aims to create U.S. jobs, building iPhone factories from scratch would be expensive and time-consuming. The U.S. lacks the skilled labor and supply chain ecosystem China and India offer, and automation would reduce job creation. Apple’s $500 billion investment in the U.S., including a new AI server factory in Texas, suggests some commitment, but mass iPhone production remains unlikely.
- Trade Tensions: Forcing Apple to prioritize U.S. production could strain trade relations with India, especially if India retaliates with tariffs or loses its status as a manufacturing partner.
Impact on Apple
- Financial Strain: Shifting production to the U.S. could cost Apple $30–40 billion, as estimated by analysts, due to higher production costs and infrastructure investments. This could erode profit margins, given that Apple earns 35 cents per dollar of product sales.
- Supply Chain Disruption: India’s role as a hedge against China’s geopolitical risks would be compromised, leaving Apple vulnerable to U.S.-China trade tariffs, which currently exceed 100% on Chinese goods. Apple’s stock lost $770 billion in market capitalization after tariff announcements in April 2025, highlighting its sensitivity to trade policies.
- Market Share Risks: In India, halting expansion could limit Apple’s ability to compete with Android brands, stunting growth in a market with long-term potential comparable to China’s 15 years ago. Globally, Apple’s supply chain resilience would suffer without India’s growing ecosystem.
Conclusion
President Trump’s call for Apple to stop building factories in India has introduced significant uncertainty into Apple’s global manufacturing strategy. While Apple has not confirmed any change to its plans, the potential halt of its India expansion would have profound consequences. For India, it could mean lost jobs and a setback to its manufacturing ambitions. For the U.S., it risks higher iPhone prices and limited job creation. For Apple, it threatens financial strain and supply chain vulnerabilities. As India’s $30 billion smartphone market continues to grow, and with Apple’s $22 billion production base already established, the tech giant faces a critical decision on balancing geopolitical pressures with economic realities. The coming months will reveal whether Apple doubles down on India or pivots under U.S. pressure.