Apple Inc. is taking a very high-profile step to alter its manufacturing strategy. They are moving some of their core iPhone production from China to India. This transition is bound to face heavy headwinds. Dan Ives, an analyst at Wedbush Securities, recently discussed the perils of this undertaking. He further indicated that the process might take several years.
The approximate cost of the transition is expected to be $30 billion to $40 billion. In fact, Apple’s choice was likely influenced by growing pressure from the tariffs. These were the tariffs that the Trump administration unilaterally imposed on all imports from China. Earlier this month, President Trump announced tariffs of up to 145% on certain Chinese goods, intensifying the urgency for companies like Apple to diversify their supply chains.
Challenges in the Transition to India
Transitioning production to India is expected to be a challenge in the near term. Ives pointed out that India grapples with “massive infrastructure problems in terms of traffic and mobility,” which may hinder production efficiency and increase costs for Apple. India at the moment has a high 26% tariff on smartphones. A 90-day pause on these tariffs is set to expire in early July, likely adding uncertainty to Apple’s move-to-India strategy.
Earlier this week, Vice President JD Vance visited India and held discussions with Indian Prime Minister Narendra Modi, signaling the U.S. administration’s intent to strengthen ties with India’s leadership amid these manufacturing shifts. This is a big step towards decreasing our reliance on Chinese manufacturing. Simultaneously, it will deepen economic engagement and collaboration with India.
While Apple could certainly benefit from making such a shift, Ives stressed there are a host of challenges that would make Apple’s move far from seamless. “The infrastructure problems in India may slow down production and cost Apple money,” he stated, underlining the challenges that lie ahead for the tech giant as it seeks to implement its ambitious plans.
Author’s Opinion
While Apple’s shift to India might reduce its reliance on China, the company is still likely to face significant hurdles in terms of infrastructure and local regulations. The decision to move production is ambitious, but the scale of challenges — from tariffs to infrastructure — cannot be underestimated. The timeline for these changes could take longer than expected, and the potential risks involved make this transition a difficult one to navigate.
