US President Donald Trump has warned of a 25% import tariff on iPhones made in India.
Despite this, Apple’s overall production cost for Indian-manufactured iPhones will still be lower compared to making them in the US.
GTRI Report on iPhone Manufacturing Costs
A report by the Global Trade Research Initiative (GTRI) states that even after adding the 25% tariff, iPhones made in India will cost less.
The report is based on the current value chain of an iPhone priced around $1,000 (₹85,100), with inputs from more than 12 countries.
Apple’s Share and Global Contributions
Apple earns the largest share of the iPhone’s value—about $450 per device—for its brand, software, and design. Other countries contribute as follows:
USA: Companies like Qualcomm and Broadcom contribute about $80.
Taiwan: Chipmakers contribute around $150.
South Korea: OLED screens and memory chips account for about $90.
Japan: Supplies $85 worth of camera systems.
Germany, Malaysia, Vietnam: Together contribute $45 in smaller components.
India and China’s Role in Assembly
India and China mainly handle assembly, but only get about $30 per iPhone—less than 3% of its retail price.
Labor Cost Difference: India vs USA
The major reason for lower costs in India is the significant gap in labor wages:
In India, workers earn around $230 (₹19,180) for assembly work.
In the USA, due to minimum wage laws, workers are paid about $2,900 (₹2,41,800).
This results in assembly costs of:
India: $30 (₹2,500)
USA: $390 (₹32,520)
Government Support in India
Apple also benefits from India’s Production-Linked Incentive (PLI) scheme, which further lowers the cost of manufacturing iPhones in India.
