Why? Because the economics are too compelling to ignore. Tariffs or no tariffs, the math still works for India and Apple.
Even if such tariffs are enforced, producing iPhones in India remains far cheaper than shifting operations to the United States. Add to that the PM Modi government’s incentives, a growing supply chain ecosystem, already made massive investments in new facilities—and the picture becomes clearer.
India is not just a cost-effective alternative to China. It’s Apple’s next big production base. Here is a break down of the numbers answering why.
Let’s do the math
According to a report from the Global Trade Research Initiative (GTRI), the value of a $1,000 iPhone is created across multiple countries. Apple, thanks to its brand, design, and software, takes home the biggest share—about $450.
Taiwan contributes $150 by manufacturing chips, South Korea adds $90 through OLED screens and memory components, and Japan supplies $85 worth of camera systems. US chipmakers like Qualcomm and Broadcom add another $80. Smaller contributions from Germany, Vietnam, and Malaysia total around $45.
In contrast, the actual assembly of the iPhone—done in India and China—brings in only about $30 per device. That means the countries doing the physical work earn less than 3% of the iPhone’s final retail value. It’s clear that the bulk of the value comes from design and advanced components, not assembly.
| Country / Region | Contribution (USD) | What they provide |
| Apple (U.S.) | $450 | Brand, design, software |
| Taiwan | $150 | Chips |
| South Korea | $90 | OLED screens, memory chips |
| Japan | $85 | Camera modules |
| U.S. (Qualcomm etc.) | $80 | Semiconductor components |
| Germany, Vietnam, Malaysia | $45 | Smaller parts |
| China + India | $30 | Assembly (Source: GTRI) |
Now compare that to the US
If Apple moved its assembly operations to the US, the numbers would change dramatically.
In India, factory workers earn around $230 per month. In California, due to higher minimum wages and living costs, that number jumps to about $2,900 a month. That’s a 13-fold increase in labor cost.
As a result, assembling an iPhone in India costs around $30. But if the same job were done in the US, the cost would skyrocket to approximately $390.
That’s just the assembly cost alone—not including the price of components or logistics.
Let’s add the tariff
Now, let’s factor in the 25% import tariff that Trump has proposed on Indian-assembled iPhones.
The $30 assembly cost would go up by 25%, or $7.5. This means the cost per iPhone would rise to $37.5 with the tariff.
Even after this increase, the cost is still far below the $390 that Apple would have to spend if it assembled the phone in the US.
In other words, even with the extra duty, Indian assembly is about ten times cheaper than US assembly.
Impact on Apple’s profit margin
Apple currently earns a profit of about $450 per iPhone, largely because it handles the design, software, and branding.
If the company were to shift production to the US and pay $390 for assembly instead of $30, its profit margin would fall drastically—possibly down to just $60 per phone, unless it significantly raised retail prices.
That’s a huge drop, and one that Apple would want to avoid.
Moreover, the PM Modi-led Central government offers a Production-Linked Incentive (PLI) scheme that further lowers the effective cost of manufacturing in India, giving Apple even more reasons to stay the course.
Foxconn’s big India bet
Beyond cost, India also offers scale. At Foxconn’s Devanahalli plant near Bengaluru, activity is in full swing.
This factory, built across 300 acres, is part of Foxconn’s broader China+1 strategy. The company, which is Apple’s largest contract manufacturer, has committed a total investment of $2.56 billion at the site.
Phase 1, with a ₹3,000 crore investment, is nearly complete, and production targets are aggressive, according to an ETtech report.
The factory aims to assemble 100,000 iPhones by December 2025, with even larger volumes planned for the years ahead. Foxconn is also building dormitories to house up to 30,000 workers, with a strong focus on hiring women. This mirrors Foxconn’s successful China model, which relies on on-site housing and shift-based work systems.
Employees have confirmed to ETtech that some iPhone variants have already started assembly in May, with others scheduled for August. The goal is clear: to start shipping iPhones from Karnataka by June.
Workers are already operating in shifts, including at night, and dormitory construction is on track to finish by the end of the year.
Foxconn’s Devanahalli plant alone is set to become one of the company’s largest globally. Apple CEO Tim Cook has already said that a majority of iPhones sold in the US will soon have India as their country of origin. Meanwhile, the Taiwanese manufacturer is also expanding to other Indian states like Tamil Nadu and Telangana, and diversifying into other Apple products like AirPods.
Final verdict: India makes most sense
All of this considered, despite threats of tariffs, the overall economics of iPhone manufacturing still heavily favours India.
The labour cost advantage is huge, with Indian workers costing a fraction of their American counterparts. Even after adding the 25% tariff, assembling an iPhone in India costs only $37.5—far less than the $390 it would cost in the US Apple also benefits from the Indian government’s PLI scheme, which offers additional financial support.
The numbers, the infrastructure, and the momentum all point in the same direction and the math cannot be ignored.
