It’s a trade war between India and China with a tipping point brought to you by Apple.
In the past, trade wars have often ignited tensions that spiral into proxy wars and real conflicts.
At the forefront of potential conflict in South East Asia is Apple’s shift of iPhone manufacturing from China to India, driven by U.S.-China trade tariffs and geopolitical strategies.
CNET reports:
Apple Is Moving US iPhone Assembly to India Amid Tariff Turmoil
“Apple will be sourcing almost its entire line of iPhones sold in the US — about 60 million phones a year — from assembly facilities in India, CEO Tim Cook said Thursday.
The planned move comes against the backdrop of the Trump administration imposing tariffs against China of up to 145%.
The tech giant is predicting a $900 million impact to Apple’s costs this coming quarter if tariff policies, rates and applications stay as they are right now.
“For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin,” Cook said during Apple’s Q1 earnings call on May 1, “and Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch and AirPods products sold in the US.”
It comes as some products such as mobile phones and computers have been exempted from those tariffs for the time being.
Apple has long centered its iPhone production in China, making it vulnerable to any trade war between the two countries and spurring speculation that tariffs could mean price increases for the company’s biggest-selling product.
By moving third-party assembly of US iPhones to India, Apple could avoid the most significant cost pressure of a trade war, though India itself faces new tariffs as well.”
By 2026, India is set to produce most iPhones for the U.S. market, with 20% of global production already there.
Here are several more reasons tensions are rising:
First, the move is backed by India’s “Make in India” incentives, and escalating tension over China and India’s Sino-Indian rivalry.
The rivalry surrounds a 3,488 km Line of Actual Control (LAC), an un-demarcated border.
The dispute is mostly over these key entry points into each country, Aksai Chin (claimed by India, controlled by China) and Arunachal Pradesh (claimed by China as South Tibet).
Second, China is facing reduced manufacturing dominance.
Some reports are saying the factory shut downs are worse than during COVID with some 20% of factories shutting down.
So another, permanent move from one of the West’s biggest manufacturers challenges its economic right in the region.
Additionally, without suffering as much from tariffs as China, India’s gaining economic leverage.
Yet, tensions are rising.
Specifically, over Pakistan.
China’s has deeply allied itself with Pakistan by providing economic support and military aid.
India views this as China encircling them, forming a prison.
In turn, India is aligned with the U.S., Japan, and Australia, which is also alarming for China.
Really, this trade war has been going on for years.
And Apple moving out is almost a tipping point.
Apple provides massive economic benefits all over China with 12 major factories.
Two the biggest, Foxconn and Pegatron handle the majority of iPhone assembly, with Foxconn being the largest, assembling about 70% of iPhones.
Foxconn operates the world’s largest iPhone factory, employing over 300,000 workers and is capable of producing 500,000 iPhones per day.
So you can see the scale…
And why it’s so important to China.
Yet, it is not difficult for Apple to slowly move elsewhere.
Most of the iPhone’s parts are put together elsewhere.
If unchecked, these tensions—combined with border disputes and proxy competitions—risk escalating into broader conflicts.
