In a significant move driven by the ongoing trade tensions between the United States and China, Apple intends to relocate the final assembly of all iPhones destined for the U.S. market to India as early as next year, according to a report by the Financial Times. Citing individuals familiar with the matter, the report highlights that President Donald Trump's trade policies are compelling the tech giant to accelerate its diversification away from China, which has long been the cornerstone of its manufacturing infrastructure.

This potential shift represents a bold acceleration of Apple's efforts to build a more resilient and geographically diverse supply chain. If successful, this strategy aims to have over 60 million iPhones assembled annually in India by 2026, effectively doubling the current production output in the country.

The impetus behind this move is multifaceted. Firstly, by shifting assembly to India, Apple can potentially circumvent the steep tariffs imposed by the U.S. on goods imported from China, thus mitigating significant cost increases. Secondly, it reduces the long-term geopolitical risks associated with the intricate and often strained relationship between the U.S. and China. This pivot comes on the heels of renewed tariff threats from President Trump, pushing Apple to proactively secure its supply chain for the crucial U.S. market.

Apple has been progressively expanding its manufacturing footprint in India over the past few years, collaborating with contract manufacturers such as Foxconn and Tata Electronics. This gradual build-up of capacity in India now appears poised to take center stage in Apple's global production strategy for its flagship product in the United States. Notably, in March of this year, Foxconn reportedly shipped iPhones worth $1.31 billion from India, marking a record for single-month exports.

While the assembly of iPhones is the final stage in the production process, it's important to note that Apple still relies heavily on Chinese suppliers for a significant portion of the components that go into the devices. Therefore, this shift in assembly doesn't entirely sever Apple's ties with China, but it signals a clear direction towards making India an increasingly central hub for iPhone production, at least for the U.S. market.

This strategic maneuver could have significant implications for India's ambition to become a global manufacturing powerhouse, aligning with Prime Minister Narendra Modi's vision for the country. It also reflects a growing confidence within Apple regarding India's manufacturing capabilities and its potential to support the scale and quality demands of iPhone production. For U.S. consumers, this shift could potentially mitigate price increases that might otherwise occur due to tariffs on China-made goods. However, the long-term impact on pricing will also depend on various other factors within the global supply chain and trade landscape.