After the United States imposed a 26 percent tariff on Indian goods under President Trump, Indian officials still held out hope. The broader context offered reasons for optimism: China was facing even steeper tariffs, and other Asian competitors like Vietnam and Bangladesh were similarly penalized. India saw a strategic opening to attract manufacturing that global companies were pulling out of China.
That opening is narrowing. With President Trump now softening tariff pressure on China, India finds itself lumped into an awkward middle ground—still facing high U.S. tariffs but without the upside of being a favored alternative.
Then came the unexpected swipe at Apple. Once almost entirely reliant on Chinese factories, Apple is projected to manufacture more than 25 percent of its iPhones in India by the end of the year. This shift had become a point of pride for Indian policymakers. But Trump’s recent remarks made clear that he sees this not as diversification, but as a missed opportunity for American factories.
“I told Tim Cook: ‘We’re not interested in you building in India,’” Trump said in a May speech, insisting that production should happen in the United States instead.
The timing was poor for India, which is racing to renegotiate the steep tariff before a July deadline. Commerce Minister Piyush Goyal has already made two trips to Washington since Trump’s reelection. Though he recently declared that the first “tranche” of a bilateral trade agreement was in motion, uncertainty remains.
Behind the scenes, Indian negotiators appear unfazed by the Apple comments—at least publicly. Officials close to the talks insist the U.S. cannot compete with India’s wage structure or emerging supply chain efficiency. In Tamil Nadu, the Indian state at the center of iPhone assembly, local governments have partnered with companies like Foxconn to build infrastructure and support high-tech growth.
The costs tell part of the story: engineering roles in India pay a fraction of what they do in the United States. Local dormitory-style housing and government subsidies further reduce overhead. Indian factories are not just assembling phones—they are increasingly producing the parts, creating a dense industrial ecosystem reminiscent of China two decades ago.
While Trump’s comments may be read as negotiating theatrics, they have introduced fresh anxiety at a delicate moment. India’s strategy of courting American tech investment while avoiding political entanglements is proving difficult to sustain—especially when the world’s most powerful CEO is caught in the middle.