Apple Shifts iPhone Production to India to Sidestep U.S.-China Tariffs, Sends Five Shiploads to U.S.

Apple Inc. (NASDAQ: AAPL) is accelerating its pivot away from Chinese manufacturing, shifting more iPhone production to India in response to newly imposed U.S. tariffs on Chinese imports, according to a report by The Wall Street Journal. The move, described as strategic yet temporary, comes as Apple seeks exemptions from the escalating duties reintroduced by former U.S. President Donald Trump — exemptions the company successfully secured during his first administration.

Further, in a striking development reported by sources of Indian government officials, Apple reportedly shipped five planeloads of iPhones and related products from India to the United States over just three days in late March. These expedited air shipments occurred just ahead of the 10% reciprocal tariff imposed by the U.S., which took effect on April 5. The volume and speed of the exports signal Apple’s urgency in mitigating tariff-related risks while safeguarding inventory for one of its most critical markets.

Under the latest tariff structure, the U.S. has raised levies on Chinese imports to a steep 54%, while goods imported from India face a significantly lower 26% rate. As China issued retaliatory duties following Washington’s April 2 announcement, Trump warned of additional tariffs should Beijing fail to reverse its countermeasures — intensifying pressure on global companies like Apple.

The iPhone, which generates roughly 50% of Apple’s total revenue, remains highly dependent on China for its production. That reliance has become a growing concern for investors and analysts alike. Apple shares recently suffered a 20% drop over a three-day span, marking the company’s steepest short-term stock decline in nearly 25 years.

According to estimates from TechInsights, the new tariffs could add as much as $300 to the $550 hardware cost of an iPhone 16 Pro. The device, which currently retails for around $1,100, could see margin erosion or higher price tags if the full tariff impact is passed along to consumers. By shifting production and shipments to India — where the tariff burden is lower — Apple aims to contain cost escalations.

A source familiar with the company’s planning told WSJ that Apple is actively assessing the global ramifications of varying tariff structures. “Any price hike to offset this impact cannot be limited to just the U.S. market, but will have to be taken across key global regions, including India,” the source explained.

While Apple has been gradually expanding its production footprint in India over recent years, recent geopolitical and trade developments have sharply accelerated that trend. Partnering with contract manufacturers like Foxconn and Pegatron, Apple is leveraging India’s “Make in India” initiative, which offers incentives and streamlined regulations for foreign electronics firms.

Despite these efforts, Apple is not out of the woods yet. The company continues to analyze the broader pricing impact across all key markets. With rising manufacturing costs and ongoing tariff uncertainty, Apple faces difficult choices: absorb the costs internally or push them onto consumers, risking a dent in global demand.

As the U.S.-China trade standoff escalates, Apple’s reliance on China is becoming increasingly untenable — and India may well become the company’s next major manufacturing stronghold.