Is India's breathless pursuit to bring Apple's flagship iPhones and the production of its accessories home set to fail just when it seemed to be paying off?
The billion-dollar question comes on the back of Trump's new, seemingly relentless campaign to take Apple back to the US. Last week, he was vocal about his 'little problem Tim Cook'. And now, on Friday, he has dropped his 25%-tariff-on-all-iPhones-sold-in-the-US-but-manufactured-outside bomb.
Recalling his conversation with the chief of Apple, Trump had said on May 15, "Tim, we treated you really good, we put up with all the plants that you built in China for years, now you got to build for us.
"We're not interested in you building in India, India can take care of themselves," he had added then.
The US President echoed this message on May 23 also.
For India, manufacturing is a major pillar of Prime Minister Narendra Modi's administration and winning over Apple implied that the country's electronics ecosystem was finally going to flourish.
There's another reason Trump's Apple remarks are concerning.
During his first term, Trump's grievance centred around tariffs on prominent American goods like bourbon whiskey and Harley-Davidson's high-end motorcycles, which India was eventually forced to reduce. Now with his threats, will Trump hem Apple in and manage to shift their manufacturing back to the US?
India can take some comfort in the fact that it isn't as easy to roll production lines as it is to get import duties reduced. And like Cook explained in the past, his company's China presence wasn't due to low labour costs but because of skilled manpower that can fill up several football stadiums. The Apple Chief contrasted this with the US, where those with such talent can barely fill a conference room.
Moreover, Apple spent significant time and money to establish its India business both from a market and manufacturing perspective. Production started small when Apple wanted to reduce its over-reliance on China, but gradually India emerged as a critical manufacturing hub.
Likewise, India is a significant market, a fact acknowledged by none other than Apple itself, which opened its first brick-and-mortar outlet in Mumbai and Delhi in 2023. What made it special was that the move came two decades after Apple began building its first overseas store in Japan.
India now produces 20% of global iPhones, with 40 million units produced, worth over $22 billion in 2025. Foxconn, Apple's production partner, is now even making AirPods in Telangana and will produce iPhone 17 Pro models in India and China simultaneously.
Trump, it must also be noted, has clarified that he has no problem with Apple producing iPhones in India for the Indian market. What he doesn't want is the company making devices in India for US consumers. This should only be done in the US, the President insists. He cited a recent promise by Apple to spend $500 billion in the US over the next four years, including on a plant in Houston to produce chips for servers.
So will Trump's threat bulldoze India's Make-in-India into defeat? Or pose a serious threat to the rise of India's electronics industry? Or is it yet another pressure tactic or simple rhetoric?
The tariff deal headache
The development comes at a time when Trump had turned up the heat slap-bang in the middle of trade talks, stating that India was ready to offer zero tariffs!
Speaking at an event in Qatar last week, he had said India had "offered us a deal where basically they are willing to literally charge us no tariff". He didn't provide further details, while the Indian government didn't dismiss it unconditionally either.
Unconfirmed news reports suggest that Delhi had indeed proposed zero tariffs on some goods like auto components and pharmaceuticals on a reciprocal basis up to a certain quantity of imports.
Trump's comments came days after India threatened to impose retaliatory tariffs in response to higher US duties on steel and aluminum, suggesting that Delhi may be adopting an assertive approach in its trade negotiations.
India's seemingly tougher stance also came close on the heels of a successfully US-China trade deal last week, where Beijing managed to restore back previous levies without agreeing for any further lower duties.
How much role did Delhi being miffed over Trump's repeated declarations that he brokered the ceasefire between India and Pakistan after four days of military conflict play in all this? We can only wonder.
It must be noted that since returning to the White House, Trump has been openly complaining about the trade imbalance between the two countries.
In 2024, the US had a $45.7 billion trade deficit with India. The US is India's largest trading partner, while India is the US' 10th-largest trading partner. Having long complained that India’s tariffs were too high and hurt US businesses, Trump has pledged to impose "reciprocal" tariffs of 26%, which are currently on hold.
India is racing against time to finalise a trade deal before Trump's tariff pause ends in July.
A high-level delegation led by Piyush Goyal, Minister for Commerce & Trade, just returned from a four-day tour to the US to finalise the terms of a three-stage trade deal. Goyal said the talks were fruitful with US Commerce Secretary Howard Lutnick towards concluding the first tranche of India-US Bilateral Trade agreement. A mutually favourable trade deal will lead to higher trade and help reach the $500 billion bilateral trade target by 2030.
India was one of the first countries to begin trade negotiations with the US, with both sides agreeing to finalise the first phase of a bilateral deal this year. As per reports, an interim deal would provide market access for some farm products and industrial goods, while addressing certain non-tariff barriers.
The second stage will have a detailed agreement focusing on the 19 areas under the terms of reference agreed by both India and the US in April. The final stage will be a comprehensive agreement for which Congressional approval would be required and could be expected next year.
India's recent trade pact with the UK offers a glimpse of the concessions Delhi might offer to appease Trump, and yet hope to increase India's manufacturing, whose share of GDP has been stagnating at about 15% for decades. Data from the World Trade Organisation pegs India's simple average tariff at 17%, substantially higher than the US' 3.3% as of 2023.
In order to raise growth from the current 6% to its potential 8%-9%, India needs foreign investment and also ensure that its goods have a global market.
