Will the US-China Tariff Truce Disrupt Apple’s India Manufacturing Plans?

Just days after Apple Inc’s CEO Tim Cook revealed plans to begin airlifting a majority of iPhones for the American market from India, the geopolitical winds shifted. The United States and China recently reached a 90-day tariff truce, aimed at de-escalating a long-standing trade dispute. This development prompted speculation about its impact on Apple’s strategy and India’s growing role in global electronics manufacturing.

However, according to officials from the Ministry of Electronics and Information Technology (MeitY), there is no cause for concern. “There’s no change in Apple’s India strategy it can only be enhanced,” a senior government official confirmed.

Read More: US-China Trade Deal: Agreement to Reduce Tariffs by 115% for 90 Days. 

India’s Tariff Edge in Smartphones Still Intact

Smartphones, which are a key component of Apple’s exports from India, currently enjoy zero duty when imported into the US, offering a significant edge over China, which faces a 20% tariff tied to fentanyl enforcement policies. This distinction positions India as a favourable destination for electronics manufacturing and export, at least in the short term.

Even if the US decides to withdraw the fentanyl-related levy after the 90-day window, India’s growing manufacturing base and policy support may continue to make it a viable alternative to China.

Apple’s Shift Away from China Is Long-Term

According to news report, Apple’s strategy clarified that the company’s production shift away from China was conceived well before the current tariff battles. The tariff regime may have reinforced the urgency, but the decision is driven by the broader need to diversify supply chains and reduce dependency on a single country.

Apple reportedly aims to move a quarter of its iPhone production capacity to India by FY26. This aligns with India’s broader push to become a global manufacturing hub through programmes such as the Production Linked Incentive (PLI) scheme.

Tariff Differences Across Sectors Still Exist

While the smartphone sector remains largely unaffected by recent tariff talks, other sectors like electronics, gems and jewellery, and auto components may experience shifts depending on US policy decisions.

Currently, Chinese exports in electronics and jewellery face a combined duty of 30%—including a 20% fentanyl duty and a base tariff of 10%. In contrast, Indian exports in these categories are taxed at just 10%. In auto components, all countries, including India, face a 25% tariff, but China pays an additional 20%, taking its total to 45%.

Industry Seeks PLI Extension Amid Uncertainty

In response to global trade uncertainties, mobile device manufacturers in India are pressing for a continuation of the PLI scheme beyond its scheduled end in FY26. Industry stakeholders argue that reducing the “disability” in production costs is essential to maintain competitiveness, especially if the US alters its tariff structure.

Conclusion

While the temporary US-China tariff truce introduces some uncertainty, Apple’s strategic shift to India appears well-anchored and insulated from short-term trade negotiations. With policy support and established advantages in certain sectors, India’s role in the global electronics value chain is set to strengthen, regardless of how the next 90 days unfold on the geopolitical front.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.