• Source:JND
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A recent report by the Global Trade Research Initiative (GTRI) shows that even with the implementation of a 25% tariff on iPhones imported from India, the cost of production would be far cheaper than in the United States.

This report comes after former President Trump’s comments regarding potentially overtaxing Apple’s iPhones if the shift of production to India continues. Although, as the report also suggests, those taxes would not change the primary rationale for producing in India.

The Global Value Chain of an iPhone

The report provides a detailed breakdown of the value chain for a $1,000 iPhone (approximately ₹83,400):

- Apple: Retains the largest share — about $450 (₹37,530) — through its brand value, software, and product design.

- U.S. component makers (e.g., Qualcomm, Broadcom): Add approximately $80 (₹6,672) per unit.

- Taiwan: Contributes $150 (₹12,510) for chip fabrication.

- South Korea: Provides $90 (₹7,506) worth of OLED screens and memory chips.

- Japan: Adds $85 (₹7,089), mainly for camera systems.

- Germany, Vietnam, Malaysia: Supply parts worth $45 (₹3,753) combined.

- China and India (Assembly): Despite being key manufacturing hubs, they earn only $30 (₹2,502) per iPhone, less than 3% of its retail price.

Labour Cost Advantage in India vs the U.S.

The GTRI emphasised that labour costs remain the decisive factor keeping India competitive:

In India, iPhone assembly workers earn roughly $230 (₹19,182) per month. In contrast, in U.S. states like California, labour costs average around $2,900 (₹2,41,860) per month, over 13 times higher. This disparity means that assembling an iPhone in India costs Apple just $30 (₹2,502), compared to $390 (₹32,526) in the United States.

Tariff Impact and Profitability

The GTRI studies state that even with a 25% import duty, iPhones assembled in India would still be significantly cheaper than those made in the United States. It is estimated that if Apple were forced to move production back, Profit per device would drop from 450(₹37,530) to 60(₹5,004) unless retail prices were drastically increased.

Moreover, there are Production-Linked Incentives (PLI) for the manufacturing of electronics in India, which worsen Apple's profit margins when shifting production to India.

Conclusion: India Still Holds the Edge

GTRI's work emphasises that, regardless of future U.S. isolationist strategies, the value of global supply and demand, iPhone assembly line requirements, labour economics, and government subsidies make India a competitively advantageous and strategic site for assembly. With the GTRI report, India looks forward to making a stronger contribution to the smartphone global supply chain ecosystem.