Even if the U.S. imposes a 25% tariff on iPhones made in India, they would still be cheaper than those made in America, says a report by the Global Trade Research Initiative (GTRI). This is mainly because making iPhones in the U.S. is far more expensive due to high labour costs.
The report explains that the value of a $1,000 iPhone is shared among many countries. Apple itself takes the biggest share—about $450—for brand, software, and design. Parts come from across the world: $80 from U.S. companies like Qualcomm and Broadcom, $150 from Taiwan for chips, $90 from South Korea for screens and memory, and $85 from Japan for camera components. Smaller parts from Germany, Vietnam, and Malaysia add another $45.
India and China are mainly responsible for assembling the iPhones, but they earn only $30 per device—less than 3% of the total price. The reason India remains a preferred option is due to low wages. Indian workers earn about $230 a month, while in California, wages can reach $2,900. So, assembling in India costs $30, compared to $390 in the U.S.
This comes after Donald Trump warned Apple to manufacture iPhones in the U.S. or face a 25% tariff. He stressed that iPhones sold in America should be produced domestically—not in India or elsewhere—and mentioned that he had informed Apple CEO Tim Cook of this expectation a long time ago.
On top of that, Apple benefits from India’s government incentives under the PLI scheme. If Apple shifted its manufacturing to the U.S., its profit per iPhone would drop from $450 to just $60—unless they significantly raise the retail price.
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