Why Apple is expanding iPhone production in India despite Trump’s objections

Workforce Availability

India’s young and expanding labor force gives it an edge in manufacturing. The US, in contrast, faces challenges due to an aging and expensive workforce, despite higher skill levels.

Considering labor costs are over 10 times higher in the US, India is significantly more attractive for labor-intensive assembly operations. Moreover, Apple suppliers in India benefit from PLI subsidies of up to ₹6,600 crore (~$790 million) over three years, compared to no similar targeted incentives in the US.

Additional incentives for component manufacturing in India—₹23,000 crore (~$2.75 billion)—are expected to further bolster companies like Foxconn. In the US, although there are general tax breaks, they are not as targeted or industry-specific.

Establishment Costs

The cost of establishing manufacturing facilities is also substantially lower in India. The per-labor establishment cost in India ranges from $5 to $8, compared to $50 to $60 in the US, according to industry estimates.

Export Subsidies

India supports export-oriented units through reduced duties and direct cash incentives via the PLI scheme. The US, by contrast, does not offer export-specific subsidies for iPhone production.

Infrastructure and Ecosystem

While the US has a mature component supplier base, it is not optimized for Apple’s iPhone supply chain. In India, especially in states like Tamil Nadu, the ecosystem is rapidly developing to meet such demands.