Trump's iPhone warning: How big a blow to India's 'Make in India'? Fear of economic and employment crisis

New Delhi: US President Donald Trump's warning to Apple CEO Tim Cook has put India's ambitious 'Make in India' campaign in danger. "I don't want you to make iPhones in India. You can make iPhones in India, but iPhones for America should be made in America," Trump said at a business summit in Qatar on May 14, 2025. Following this, on May 23, Trump announced on his Truth Social platform that if Apple makes iPhones in India or other countries, a 25% tariff will be imposed on iPhones sold in the US. This warning has sent a wave of concern in India's smartphone exports and employment sector.

Importance of Apple to India

Apple has made India a key hub of its global supply chain in recent years. According to a Bloomberg report, iPhones worth $22 billion were produced in India by March 2025, up 60% from the previous year. Apple's main suppliers in India, such as Foxconn and Tata Electronics, have started producing the iPhone 12, 13, 14, 14 Plus, 15, and more recently the iPhone 16 Pro and Pro Max. Foxconn has invested an additional $1.5 billion in its unit in Tamil Nadu, while Tata has taken over Pegatron's operations.

Apple's ecosystem in India has created nearly 2 lakh jobs, and in March 2025, India exported over 3 million iPhones to the US, accounting for 98% of Apple's monthly exports. Apple had announced that most iPhones sold in the US from June 2025 would be manufactured in India, giving India the advantage of shifting production from China.

Impact of Trump's warning on India

1. Impact on exports: If Trump imposes a 25% tariff, iPhone exports from India to the US will become expensive. This could increase Apple's costs, which could be passed on to consumers or force Apple to reduce production in India. Experts estimate that the price of iPhones could increase 3 times if production shifts to the US, as labor and manufacturing costs are higher in the US.
2. Threat to employment and investment: Apple's production in India has created millions of direct and indirect jobs. If Apple reduces production in India, employees of Foxconn, Tata, and other suppliers could be affected. In addition, uncertainty looms over Foxconn's $1.5 billion and Tata's planned investments.
3. Setback to Make in India: The Indian government's 'Make in India' campaign is dependent on investments from global brands like Apple. Trump's warning may also make other companies reluctant to invest in India, which could affect India's dream of becoming a smartphone manufacturing hub.

Apple and Indian government's stance

Apple has assured the Indian government that it will not change its investment plans in India. The company said India will remain an important part of its global supply chain. A senior Indian official said, "India has become an important mobile manufacturing hub. Companies like Apple make decisions based on global competitiveness, not political rhetoric."

However, some experts believe that Trump's tariff policy could complicate trade talks between India and the US. India has a bilateral trade of $129 billion with the US in 2024, with a trade surplus of $45 billion. Trump claimed that India has offered to remove tariffs on US goods, but Indian officials did not confirm this.

Comparison with Bangladesh crisis

The timing of Trump's warning coincides with the crisis of Muhammad Yunus' interim government in Bangladesh, where political instability and pressure from the military have forced Yunus to consider resignation. In India too, the uncertainty created by Trump's policies has given opposition parties an opportunity to target the government. Congress and Aam Aadmi Party posted on Twitter saying that Trump's warning is an attack on India's sovereignty and 'Make in India'.

The way forward

Despite Trump's warning, it will not be easy for Apple to stop production in India. Skilled labour, low costs, and strong supply chain in India have made it an attractive manufacturing hub. Tarun Pathak, director at Counterpoint Research, said, "Shifting iPhone production to the US is not possible overnight. It will increase costs and it may take years to re-establish the supply chain."

Trade negotiations between India and the US will continue during the temporary moratorium on tariffs until July 2025. If India makes an agreement to reduce tariffs, Apple's position may be strengthened. But if Trump implements his 25% tariff policy, India's smartphone exports and employment could be severely affected.