Trump’s tariffs could derail booming Made-in-India iPhone exports to the US

NEW DELHI: The Trump administration’s abrupt announcement of a 25% tariff on India, along with an additional penalty for New Delhi’s trade with Russia, has come as a big shock for top electronics exporters such as Apple and Samsung. Industry officials fear that “manufacturing business for the US will be lost” if the rates persist and no solution is reached through the under-negotiation bilateral trade agreement (BTA) with Washington.

The move comes days after India emerged as the biggest exporter of iPhones to the US, with a contribution of 44% in the second quarter of 2025, overtaking China, whose share fell to 25% from 61% in the same quarter of last year, according to Canalys.

This may change if the current tariffs on India persist, say industry officials, pointing out that the US administration has already exempted exports of smartphones and other electronics containing semiconductors from China from the high levies, taxing them at only around 20%.

“We are shocked at what President Trump has announced regarding tariffs on India. If these are maintained, India will lose the electronics manufacturing business to the US. Companies like Apple and Samsung will divert India production to non-US markets such as those in Europe and Asia,” a top industry official told TOI, requesting anonymity. “We were expecting more from India’s political diplomacy with the US. This is a rude shock. We are now pinning our hopes on the ongoing bilateral trade talks,” the official further added.

For Apple, which has been swiftly expanding in India and plans to ramp up the manufacturing capacity for iPhones to around 60 million units annually from the estimated 40 million units currently, this may prompt a “review” of plans. “We need to see where the bilateral trade talks with the US go, and what will be the fate of talks with China,” an official said.

“The 25% tariff rate is certainly a negative as it compares to a lower rate for peers such as Vietnam, Indonesia, and the Philippines, which compete with India in a similar category of labour-intensive products and electronics goods. If no deal is signed by September-October, we see a downside to the full-year GDP growth estimate for India by 20 bps,” Garima Kapoor, Economist and Executive VP at Elara Capital, said.

For Samsung, the situation is similar. The Korean giant, which also started to ship India-made smartphones to the US, is now likely to go in for a re-assessment. Samsung has mammoth manufacturing operations in Vietnam, which at 21% enjoys lower tariffs compared to India. “One of the things that we have prepared was to have diversification of our factories for the product we will ship to the US. Depending on the final decision by the Trump administration, we have already established a system in which we can shift from one location to another to respond to the final decision more flexibly,” Samsung’s global President and Chief Operating Officer (Mobile Experience Division) Won-Joon Choi said recently when asked about the tariff situation.