US President Donald Trump has thrown a wrench into India’s trade negotiations with the US by announcing that he wants Apple to shift its production from India to the United States instead. The move comes as a shock, given that Apple has been investing heavily in India over the past few years and is now expected to assemble up to 25% of its iPhones in the country.
India saw this development as leverage against Trump’s previous tariff hike on Indian goods. However, after Trump backed off his tariffs on China, India faced increased tariffs not much lower than those imposed on China. This change in Trump’s tactics has left India feeling frustrated and uncertain about the future of its trade relationship with the US.
Indian officials have been working to secure a reduction in the 26% tariff that was imposed on Indian goods by Trump. However, the recent announcement by Trump that he wants Apple to shift production from India to the US has complicated matters. The Indian government is now trying to balance its desire for a trade agreement with the need to protect its domestic industries.
Experts say that shifting production from India to the US would be difficult for Apple due to the complexity of its supply chain and the high cost of labor in the country. While some see this development as a bargaining tactic by Trump, others believe it may be a genuine attempt to create jobs in the US. One thing is certain: the future of India’s trade relationship with the US has become increasingly uncertain.
In 2020, the Indian government began subsidizing the manufacture of high-tech goods, which helped make parts of India competitive with China’s manufacturing marvel. The local government in Tamil Nadu also provided infrastructure to help companies like Foxconn set up their supply chain. These efforts have made India a more attractive destination for foreign investment.
As negotiations between India and the US continue, one thing is clear: the future of trade between these two major economies will depend on finding a balance that works for both parties. With the current uncertainty, it remains to be seen how this will play out.
Source: https://www.nytimes.com/2025/05/22/business/trump-tariffs-india-apple.html