Apple has big plans for India – but can change Trump’s tariff

The report is from this week’s “Inside India” newsletter of CNBC, which brings you timely, practical news and market comments on large businesses behind the emerging powerhouse and its meteorite growth. like what you see? You can get membership Here.

The consensus was that US President Donald Trump and Indian Prime Minister Narendra Modi had a successful meeting in Washington last month. What went wrong – and why Apple was caught in the middle?

To speed up all – Trade talks between the two countries are breaking up before the April 2 deadline, when Trump’s mutual tariff is determined in India.

Trump has long criticized India for the most tariffs in Asia. The analysis of Barclays suggests that India’s tariff is 11.5%on all imports. Another important concern for Washington is to widen the US-India trade deficit.

Last week, India’s Commerce Minister Piyush Goyal went to Washington, to give further concessions, slashing tariffs on major American imports in the hope, in turn, India would be exempted from the washington’s mutual tariff. However, according to the sources close to Trump’s business team New Delhi, it does not seem. He is increasing alarm bells.

According to analyst estimates from Bank of America, the technology industry stands to lose – especially apples that make up about 15% of their iPhone in India.

Finished smartphones entering India currently face 16%-20%tariffs, while according to Barclay, Indians sold in the US are at 0%.

“If the Indian exports of smartphones, recently raised-was to face similar tariffs in America, it (Indian) can give an early life-cycle shock to the electronics industry, reverse the entire China +1 story,” according to the Venugopal Gur, the head of the Bernstein, the head of the Bernstein.

Gare believes that the additional cost of tariffs will create Indian electronics, including iPhones manufactured in the country, less competitive than equipment manufactured in other countries.

Rejuvenation of India’s manufacturing sector

Bank of America analysts also believe that the proposed tariffs on India will probably increase the prices of iPhones.

It matters. Apple has been a poster child of construction revival of India, it has been seen by many as a case study as a foreign company can win in the country. Goyal mentioned Apple’s success while pitching American semiconductor companies to expand in India.

Nvidia is currently working with Reliance Industries in India on AI Research, while AMD and Micron have promised to expand into India. Apple CEO Tim Cook, who has cultivated a strong relationship with Modi, went to the country in 2023 for the inauguration of four retail stores.

India has played an important role in diversifying its supply chain to Apple and helping to reduce China. In addition to iPhones, it has started manufacturing other products in the emerging market, including iPads and airpods.

“45% of Apple’s total revenue is made in China, but they want to bring it down to 30% level,” Jean Munter said, Partner Managing Partner in Deepwater Asset Management, CNBC to CNBC on phone. However, experts said that high tariffs can challenge the expansion of Apple and reduce the company’s overall returns on investment in India.

“My guess is that Apple would like to send a message to New Delhi to inspire them to interact and motivate them to a uniform tariff structure.”

CNBC reached Apple for comment and has not heard back.

The Moorehead is studying Apple’s supply chain and believes that it has the ability to move some construction between its Asian manufacturing places in India, China and Vietnam, it needs to be done.

At this point, the only country that is more untouched by tariffs will be Vietnam, which is likely to be due to low trade imbalance between the US and Vietnam, the Moorehead told CNBC over the phone.

Tariff

There are other options.

When technology companies may use to limit the impact of China’s tariffs, Given the potential strategies, Morgan Stanley analysts wrote that an option is that “a 3 party from China in the country before the declaration of goods is a US-bound near the goods prepared from China.”

He can apply to India.

If the trade war raises the speed, technology companies can also be encouraged, not only to diversify their supply chain in one to two additional countries, but three or four, to ensure that they can pive as required. This is definitely a major venture. It can take three to five years to set up a shop in a new country. As shared supply chain experts shared with CNBC take time to establish a new plant, make a relationship with local suppliers, and to rent the right talent by obtaining necessary approval from the local government.

However, multinational companies such as Apple may have to use cash piles to spread their manufacturing footprints, already already higher. There may be a need to convert China +1 to China +3.

This may mean that Apple produces less phones than the first estimate in India.

The supply chain flexibility, while expensive, may be the key to weathering tariffs for apples. What is it for India’s ambitions that for companies going away from China, the ambitions to be a go-to-decority are completely another case.

Inflation in India falls more than expected in February. The country’s Consumer Price Index came at 3.61% on an annual basis, the country’s statistics and program implementation said on Wednesday. Economists voted by Reuters expected to read 3.98% for the period. This is the first time since last summer that inflation has come down from the target of 4% of the Reserve Bank of India and is the lowest monthly print since July 2024.

Benefits of the list at the National Stock Exchange of India. Entrepreneurs or startup founders should seize India’s advantages and list in the National Stock Exchange of India, Bors CEO Ashish Kumar Chauhan on Wednesday said at the CNBC’s Converage Live event in Singapore. India is a place where “a lot of minds, lots of enterprises and very little capital are required,” he said, and said that the Indian market had the largest number of listing in the world in 2024.

IndusInd Bank urged to calm down after seeing the accounting discrepancy. On March 10, the lender informed the Indian exchanges that he had discovered the posts on derivative trading during internal review issues. As a result of the lapse, the bank estimates that its net worth will take 2.5% hit. However, IndusInd assured investors that it was still well capitalized, making shares rebound on Wednesday after a dip on Tuesday.

Indian stocks continued their profit this week.

On March 13, by 11.15 pm local time, the benchmark Nifty 50 index increased by 0.21%, while the broad senses index was 0.15% higher.

The yield of Bonds of the Government of India 10-year-old decreased slightly by 6.708%.

This week, on CNBC TV, Pramod Balli, the founder of the Marcelus Investment Managers, feels that the Indian government’s tax deduction in its recent Union Budget on Indian consumption stocks “is not enough to transfer the needle”. This is partially because the country experienced “an increase in a good three years of strong consumption” after the epidemic, fuel to retail firms and consumers by bank loan, due to which the balloon spent. Therefore, consumers are more saving to pay that loan and pull back to expenditure.

Meanwhile, Charles Van Der Stein, President of Mercek North America, told CNBC’s Lori N Laroco that “Tariffs would never disrupt the supply chain.” While business barriers can affect one aspect of the global supply chain, other countries will step to step for that disruption. India, especially, will maintain its importance within the global supply chain as South Asian provides companies with nation production capacity as Trump tariffs are distracted by firms from China.

India releases data on its wholesale price index for February on Monday, and those who monitor the market hopes that it falls into the cooler, such as the month of consumer price index. Meanwhile, the US Federal Reserve concluded its meeting on Wednesday, during which it is expected to keep the interest rates stable.

March 14: India Business Balance for February, US University of Michigan Consumer Affairs Survey for March, UK GDP for January

17 March: India wholesale price index for February, China industrial production and retail sales for January to February, US retail sales for February

March 19: US interest rate decision, Euro Area Consumer Price Index for February

March 20: China one- and five years loan Prime Rate Decision, UK Interest Rate Decision