'Made in India iPhones will still be cheaper in US, even with Trumps 25% tariff: GTRI Report

By Admin

24 May, 2025

As global trade dynamics continue to evolve, Apple’s shift to manufacturing iPhones in India has stirred significant attention — especially following recent remarks by former U.S. President Donald Trump. Trump has threatened to impose a 25% tariff on iPhones assembled in India. However, a new report by the Global Trade Research Initiative (GTRI) reveals that even with such a duty, iPhones made in India will still be significantly cheaper for the U.S. market than if they were manufactured domestically.

India’s Cost Advantage Stands Firm

The GTRI report emphasizes that India’s cost-effective labor and the current structure of the global supply chain give it a competitive edge. Even after applying a 25% tariff, the overall cost of producing an iPhone in India remains substantially lower than in the United States. This is largely due to a stark contrast in labor costs — where an assembly worker in India earns approximately USD 230 per month, while the same job in California could cost Apple USD 2,900 per month, reflecting a 13-fold difference.

Dissecting the iPhone Value Chain

A detailed breakdown of the iPhone’s value chain shows that:

• Apple itself retains USD 450 of a USD 1,000 iPhone through branding, software, and design.
  
  

• U.S. component makers such as Qualcomm and Broadcom contribute USD 80.
  
  

• Taiwan adds USD 150 via chip manufacturing.
  
  

• South Korea contributes USD 90 through OLED screens and memory chips.
  
  

• Japan supplies components worth USD 85, mainly from advanced camera systems.
  
  

• Germany, Vietnam, and Malaysia account for another USD 45 combined.
  
  

• India and China, where the assembly happens, each earn only around USD 30 per device — less than 3% of the total retail price.
  
  

Manufacturing in the U.S.? Not Economically Viable

The GTRI report argues that shifting iPhone production to the U.S. would severely cut into Apple’s profit margins, unless the company significantly raises retail prices. Manufacturing an iPhone in the U.S. would push assembly costs to USD 390, compared to just USD 30 in India. Moreover, without the Production-Linked Incentive (PLI) that Apple receives from the Indian government, moving production to the U.S. could drop Apple’s profit per iPhone from USD 450 to just USD 60.

Global Supply Chains Still Favor India

Despite political threats and trade uncertainties, India’s position in the global value chain continues to strengthen. The GTRI concludes that India remains an economically viable and strategic location for iPhone manufacturing, even in the face of potential tariffs from the U.S. administration.

This analysis underscores a critical reality: in today’s interconnected world, global value chains and labor cost structures are powerful forces that policy threats alone cannot easily disrupt.

In essence, Made in India iPhones are here to stay — and remain a win-win for both Apple and American consumers.