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NEW DELHI: ‘Make in India’ is the mantra as global smartphone giants Apple and Samsung look to re-calibrate worldwide production to blunt the impact of Donald Trump’s higher tariffs on China and Vietnam, when shipping to the US.
Even though it is a logistical challenge with major customs and other regulatory efforts required, the issue is being addressed on an urgent basis to ensure that supplies to the US remain competitive.
Also read: Flurry of exports as firms raced to beat Trump tariffs
Apple, the world’s biggest electronics seller, has started to use production at India’s factories to ship iPhones to the US, with plans to drastically cut down exports from China. The decision is being taken as Trump has announced a 26% reciprocal tariff on Indian exports to the US, while it is 54% for China, including the 34% announced last week, and 46% for Vietnam.
“India’s factories will be increasingly used to ship only to the US. Demand in other markets such as Europe, Latin America and even Asia will now be catered to from the China factories. In a way, this will be a significant leapfrogging for iPhone production in India and may lead to major expansion in the country, if Apple decides to stick to the formula going forward,” a top industry official told TOI.
Also read: Stocked-up Apple buys time, may not pass on duties soon
Currently, iPhones in India are being made by units of Taiwanese Foxconn and Tata group. The latter had acquired the assets of Wistron and Pegatron – both from Taiwan – over the past few years. “If Apple does not go for developing all-new production zones in locations, such as the UAE and Saudi Arabia, or in Brazil – all of which have US tariffs of 10% – then there will be a significant expansion of capacity in India,” the official said.
Any such move will see major investments by both Foxconn and Tatas, which could see iPhone shipments to the US grow massively from the estimated $10 billion this fiscal. A lot will, however, depend on discussions between the US with other countries.
In case of Samsung, the matter is equally serious as its manufacturing set-up in Vietnam has exports of around $55 billion. “Samsung will find it better to ship from India at a duty of 26% than export from Vietnam. While this will be a temporary measure till the Vietnamese govt negotiates with the US, it adds a lot of importance to Make in India,” the official added. Vietnam has proposed zero duty for US exports. Samsung’s factory in Noida makes smartphones, including S25 and Fold.
Sources said those negotiating Bilateral Trade Agreement (BTA) with the US are “aware of these dynamics” and plan to use them to extract maximum for India’s global manufacturing goals.
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