Donald Trump’s 50% tariff on India go into effect August 27: Why and how prices of ‘made-in-India’ Apple iPhones will not go up
President Donald Trump’s 50% tariff on Indian goods takes effect August 27, adding to the existing 25% “reciprocal” tariffs imposed in August. However, Apple’s iPhone exports from India to the US will remain largely unaffected due to existing exemptions for semiconductor-powered devices. Apple’s semiconductor-powered devices, including iPhones, are exempt from Trump’s tariffs under a separate tariff authority that has not yet been unveiled. The Trump administration exempted smartphones, computers, and other electronics from reciprocal tariffs in April, providing major relief to companies like Apple and Nvidia.India now supplies 71% of all iPhones sold in the US market between April and June, up from 31% a year earlier. Apple said during its most recent earnings call that it made the majority of its US-bound iPhones in India.
Apple’s iPhone production in India safe under current exemptions
The US Commerce Department is currently probing sectors deemed vital to national security, such as semiconductors, under Section 232 in the Trade Expansion Act. Until those reviews are complete, there will be no levies on smartphone exports to the US, including iPhones made in India.Apple began expanding its supply chain beyond China following COVID-19 disruptions but started specifically concentrating US iPhone manufacturing in India to avoid Trump’s tariffs on Chinese goods. India currently accounts for more than a fifth of global iPhone production and has already surpassed China to become the top supplier of the device to the US market.However, the exemptions remain temporary and could change. Trump has said no one is “getting off the hook,” and his administration is working on specific semiconductor levies that could impact Apple devices.India supplied 71% of all iPhones sold in the U.S. market between April and June, up from 31% a year earlier, driven by a corresponding decline in shipments from China, according to Counterpoint Research. Apple exported $3.2 billion-worth iPhones from India between March and May 2025, with an average of 97 per cent heading to the US market.
Potential future impact on iPhone pricing
Analysts warn that the likelihood of a negotiated settlement is fading and the final effective tariff of 50% cannot be ruled out. A higher US tariff on India — if the exemptions end — could potentially make locally-assembled iPhones globally pricey compared to Apple products made in Vietnam or China.While Apple might be able to dodge tariffs on goods out of India currently, the company isn’t completely out of the woods. The Trump administration is expected to unveil results of its Section 232 investigation into semiconductor tariffs, which could impact everything from smartphones to automobiles.Apple would rather absorb higher costs for iPhones sold in the United States than slam the brakes on its India expansion, with sales largely operator-driven and sold as part of plans, potentially adding just a few dollars to monthly plans rather than an upfront blow to consumers.
