India iPhone Production Set to Rise After US Trade Deal Boost

Prime Minister Narendra Modi and US President Trump, have given the electronics industry hope for more stable policies. Although the specifics of the long-awaited trade agreement between the two countries are still murky, as are its effects on tariffs imposed on some industries. According to Trump, he and Modi have reached an agreement on a trade pact between the United States and India. These changes occur almost one year after the parties committed to pursuing a thorough bilateral trade deal.

A reduction from 25% to 18% in the US-India trade tariff was one of the terms of the agreement. When asked about India, Trump responded that the country will levy zero tariffs and other non-tariff obstacles against the United States. Additionally, the additional 25% tariff that was imposed on Indian imports by the US in reaction to India's purchase of crude oil from Russia will be removed.

Trade Bells Ringing for iPhone Manufacturers

The proposed collaboration is not seen as a quick way to increase volume in India's electronics sector, which is mostly involved in smartphone assembly for Apple. Investors and exporters may take this as a sign of policy stability, which could strengthen their plans for the future. Local powerhouses Tata Electronics and Bharat FIH Ltd, the Indian affiliates of global contract maker Foxconn of Taiwan, are two businesses that could gain from more transparent trade policies.

Both companies have made substantial investments to enhance their ability to assemble iPhones. Both companies are increasing their value generation by delving further into the supply chain for electronics. The Indian government reports that $38.6 billion worth of electronics were exported in FY25.

With over $10 billion in sales, iPhones are an important export for the United States. According to a June 2018 analysis by Mint, India has the potential to manufacture more than 60 million iPhones for export by the end of FY27, with the majority of these devices going to the US market.

Other Sectors Also Benefit From India-US New Deal

There will undoubtedly be an uptick in exports of a variety of products, not only Apple's iPhones, including medical and industrial devices.  This has led certain businesses, like Syrma SGS and Dixon Technologies, to be optimistic about the foreseeable future.

The biggest US IT company, Apple, which depends on a worldwide distributed supply and assembly chain, has felt the effects of Trump's tariffs. Apple CEO Tim Cook noted on January 29 during the company's results call for the December quarter. He stated that tariffs on countries throughout the world, particularly China, cost the iPhone maker an additional $1.4 billion, or 0.9% of its quarterly operating revenue.