Apple’s cost calculus: Why Donald Trump’s 25% tariff won’t scare Tim Cook off India

Donald Trump may be ready to revive his tariff war, but a 25% duty on Made-in-India iPhones still wouldn’t make them pricier than U.S.-made ones, says a new report by the Global Trade Research Initiative (GTRI). The takeaway: India’s cost edge is so steep, even Trump-style tariffs can’t close the gap.

In India, assembling an iPhone costs Apple about $30. In the U.S., the same process would cost around $390—primarily due to labor costs. Indian assembly workers earn roughly $230 per month, while U.S. workers, especially in states like California, average about $2,900 per month—a 13x difference.

Even with a 25% tariff, the numbers still favor India. A $1,000 iPhone made in India would incur a $250 tariff. Add that to the $30 assembly cost, and the total is $280—still far cheaper than U.S. assembly alone.

The iPhone’s value chain is globally distributed: Apple retains $450 per device for branding, design, and software. U.S. chipmakers like Qualcomm and Broadcom contribute $80, Taiwan adds $150 worth of chips, South Korea provides $90 in OLED and memory, Japan supplies $85 in camera modules, and other countries such as Germany, Vietnam, and Malaysia account for another $45. Final assembly in India or China is less than 3% of the total value.

India also offers another key advantage—government support. Under its Production-Linked Incentive (PLI) scheme, Apple gets financial incentives for local manufacturing, further reducing effective costs.

JPMorgan’s analysis echoes GTRI’s findings. It estimates that shifting iPhone assembly from China to India would raise costs by just 2%. In contrast, moving production to the U.S. would spike costs by 30%.

The profitability gap is stark. Apple currently earns about $450 per iPhone. If forced to manufacture in the U.S., that profit could plunge to just $60 unless prices are raised sharply—risking demand and market share.

Moreover, Apple’s supply chain is deeply rooted in Asia. A full-scale shift to the U.S. would be logistically complex, economically unviable, and time-consuming.

Bottom line: even with tariffs, Indian-assembled iPhones remain far more cost-effective. For Apple, India isn't just a low-cost hub—it's the key to staying competitive in a tariff-fueled global market.q43