Apple orchestrated an airlift of five planeloads of iPhones and other products from its manufacturing hubs in India and China to the United States over a span of just three days in late March. The reason behind the move? A swift manoeuvre to sidestep impending US tariffs. This fast-paced, decisive operation aimed to bypass the probable imposition of the 10 per cent reciprocal tariff to be imposed by the Trump administration, which was to take effect on April 5, in addition to the existing 25 per cent tariff on steel and aluminium. As the brand had no intention of a price hike, by accelerating shipments, Apple sought to maintain its retail prices globally without passing on the tariff-induced costs to consumers.
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To establish short-term stability amidst all the transnational chaos and fluctuating trade policies, Apple has managed to stockpile products in the US ahead of the tariff implementation.
Alongside the Apple tactics, the Indian gems and jewellery sector also, for instance, has witnessed a significant surge in exports to the US between April 1 and 4. Shipments through Mumbai’s cargo clearance system soared nearly six-fold to USD 344 million, up from USD 61 million during the same period the previous year. This surge was likely an effort to outpace the 10 per cent tariffs that took effect at midnight on April 5. Similarly, apparel exporters expedited shipments to mitigate tariff impacts.
Going back in time, India’s smartphone industry has been experiencing remarkable growth, with exports reaching unprecedented levels. In the first 11 months of the 2024-25 fiscal year (April-February), smartphone exports surged by 54 per cent to surpass INR 1.75 trillion (USD 21 billion), exceeding initial projections.
In the past year, Apple’s iPhone vendors contributed nearly 70 per cent of these exports, with Foxconn’s Tamil Nadu facility alone accounting for close to 50 per cent. Tata Electronics, after acquiring Wistron’s operations in Karnataka, accounted for 22 per cent of exports, while Pegatron contributed 12 per cent. Samsung also played a significant role, contributing around 20 per cent of total smartphone exports.
The Production-Linked Incentive (PLI) scheme has been instrumental in this export boom. The scheme has attracted investments, leading to increased production and job creation. The mobile phone industry has generated nearly 300,000 direct jobs and 600,000 indirect jobs.
Apple’s strategic pivot towards India is not solely a reaction to US-China trade tensions. The company has been gradually expanding its manufacturing footprint in India since 2017, aiming to diversify its supply chain and tap into the country’s burgeoning smartphone market. With Indian-made iPhones facing a lower 26 per cent tariff compared to the 54 per cent on Chinese imports, increasing production in India offers a cost-effective alternative.
In the near future, India’s role in Apple’s global production network is poised to contradict panicking notion and conversely become more prominent. The combination of favourable economic incentives, a skilled workforce, and a growing domestic market positions India as a strategic manufacturing hub for Apple. This shift not only aids Apple in navigating the complexities of international trade policies but also bolsters India’s status as a key player in the global electronics manufacturing landscape.
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