US President Donald Trump's 'don't want you building in India' exhortation to Apple boss Tim Cook was played down Thursday night, with government sources saying there is significant value for the global tech giant if it chooses to expand iPhone production in the country.
India has a manufacturing ecosystem that is 'good for global smartphone companies', and a company like Apple will see the competitiveness from domestic production, sources said.
'India has become a significant player in the smartphone production space... if companies recognise the value of manufacturing in India, they will continue on that path', sources said.
Sources also said any company like Apple - which has said a majority of iPhones sold in the US from the June quarter onwards will likely be 'made in India' - must acknowledge that edge.
'Their investment decisions will be based on their own competitiveness...'
Sources within Apple, meanwhile, have said the company has no plan to change its India investment plans based on what Trump said. Company executives told news agency PTI the proposal to set up a major manufacturing facility in the country will go ahead as scheduled.
Earlier today the United States President said he had told Mr Cook he does not want him "building in India" and that "India can take care of themselves". The comments were made at a business forum in Qatar, the last stop on Trump's whirlwind three-nation West Asia tour.
READ | "Don't Want You Building In India": Trump To Apple CEO Tim Cook
"I said to him, 'my friend, I am treating you very good. You are coming up with $500 billion... but now I hear you are building in India. I don't want you building in India. You can build in India... because India is one of the highest tariff nations in the world, so it is very hard to sell in India."
Trump later claimed Apple, one of the most valuable companies in the world, would be re-locating factories to the US. The company, though, has made no such comment.
Apple had committed to investing $500 billion in the US for manufacturing, but the realities are very different. The company will struggle to instantly re-create supply chains in that country large enough to make the nearly 76 million iPhones sold in the US in 2024 alone.
The costs could run into the tens of billions of dollars, analysts had said.
Apple iPhones are now being manufactured in India as well as China (File).
Trump's rambling comment also came after Cook indicated a split in sourcing strategies for iPhones, which account for nearly 50 per cent of Apple's revenue. iPhones meant for sale in the US will be made in India and existing plants in China will manufacture for the rest of the world.
Reports have said eventually Apple plans to move all production to India.
READ | Apple To Source Majority Of US iPhones From India In June Quarter
For now, the split is also a way to avoid massive tariffs being slapped on iPhones produced in China and exported to the US. The two countries are in the midst of a ferocious trade war.
There was some reprieve on that front this week after a deal that saw Beijing agree to cut duties on US imports to 10 per cent and Washington to 30 per cent. This is for 90 days only.
Previously the rates were 145 on Chinese goods and 125 on US imports.
READ | China, US Slash Mega Tariffs On Each Other, But Is Trade War Over?
At this time an estimated 15 per cent of the global iPhone output comes from India, as do popular accessories - such as the AirPods, which are being manufactured in Telangana.
In April Electronics and IT Minister Ashwini Vaishnaw said iPhones worth Rs 1.5 lakh crore had been exported in FY25. This bodes well for the Indian government's flagship initiatives to boost local manufacturing - the 'Make in India' programme - and steal a march on China.
With input from agencies
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