Apple's Manufacturing Dilemma: India vs. U.S.

If Apple were to transfer its manufacturing operations from India to the United States, as suggested by Ajay Srivastava, founder of the Global Trade Research Initiative, it is Apple that stands to lose more than India. Currently, India earns approximately USD 30 per iPhone manufactured, with a significant portion returned to Apple through subsidies. Additionally, India's strategy to reduce tariffs on key smartphone components at Apple's behest has adversely impacted local manufacturers building domestic production ecosystems.

Ajay Srivastava notes that although the sale of iPhones in the U.S. at around USD 1,000 results in India's contribution being a mere USD 30, the full USD 7 billion export value is registered against the U.S. trade deficit. A shift in Apple's manufacturing base could prompt India to seek advancements beyond simple assembly lines, focusing on cutting-edge technologies and comprehensive manufacturing of components like chips and displays.

With an average salary of USD 290 per month paid to workers in India's manufacturing units, transitioning these jobs to the U.S. would balloon costs due to American wage standards, catapulting production expenses from USD 30 to USD 390 per device. This raises critical questions about potential price hikes or profit reductions for Apple—a consideration that may influence CEO Tim Cook's decision between commercial logic and patriotism amidst political pressures from figures like Trump.

(With inputs from agencies.)