Apple CEO Tim Cook has said the company will source the majority of iPhones sold in the US from India in the June quarter, marking a strategic shift in its global manufacturing footprint amid rising tariff pressures on Chinese exports.
During Apple’s second-quarter earnings call, Cook highlighted that while China will continue to produce the vast majority of the devices for other markets, India will emerge as the primary source for devices sold in the US.
The move is a direct response to escalating trade tensions and tariff uncertainties between the US and China. Cook said the cost implications of a 20% tariff on Chinese-made Apple products shipped to the US, combined with a new 125% tariff on specific product categories like Apple Care and accessories, have prompted the company to realign its sourcing strategy.
“For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin,” Cook said, adding that Vietnam will be the country of origin for almost all iPad, Mac, Apple Watch, and AirPods products also sold in the US. China would continue to be the country of origin for the vast majority of total product sales outside the US. Cook said that Apple expects a $900-million cost impact from current global tariff regimes during the quarter.
As reported by FE earlier, in tandem, Apple has been expanding its manufacturing base in India significantly. According to filings and industry estimates, India accounted for 20% of Apple’s global iPhone production in FY25, up from 14% in FY24. The company now aims to push this share beyond 25% by the end of FY26. This rapid growth has come within four years of Apple starting iPhone manufacturing in the country under the government’s production-linked incentive (PLI) scheme.
The expansion is driven by Apple’s three major contract manufacturers, Foxconn and Pegatron in Tamil Nadu, and Tata Electronics in Karnataka, who together produced iPhones worth $22 billion in FY25. This translates to nearly 40 million units, of which 32 million, or around 80%, were exported. The bulk of these exports are destined for the US, which alone accounted for 97.6% of shipments in March 2025 following a 219% month-on-month jump in Indian exports, according to S&P Global Market Intelligence.
India’s trade advantage over China is a key factor behind Apple’s increasing reliance on the country. While Chinese exports of smartphones to the US continue to face a 20% tariff, Indian exports are exempt, giving India a distinct cost edge. This allows Apple to either maintain competitive retail pricing in the US or enjoy better margins on Indian-assembled units.
Apple’s strategic pivot comes amid mixed financial results. The company reported a 5% rise in overall revenue to $95.35 billion for the second quarter ended March 29, 2025. iPhone sales, however, dipped slightly by 2% to $46.84 billion, even as services revenue climbed nearly 12% to $26.64 billion. In India, Apple recorded its highest-ever shipment volume in the March quarter, growing 29% year-on-year. Meanwhile, sales in Greater China declined by 2.2% to $16 billion, reflecting the competitive and regulatory headwinds Apple continues to face in that market.