NEW DELHI: Apple does not intend to make any immediate changes to the retail prices of its products such as the flagship iPhone, including in India, following the Trump administration’s imposition of reciprocal tariffs as the company had sent “unusually high” number of shipments from factories in India and China to build up stocks in America despite this being a “relatively lean period”, top sources have told TOI.
Apple’s warehouses in the US remain “sufficiently stocked up for the next few months” with products shipped from key manufacturing locations at a “frenetic pace” to beat the start of the higher tax regime, that begins with a baseline 10% tariff from April 5 and thereafter with the addition of respective reciprocal tariffs (different for each country) from April 9.
“Factories in India and China and other key locations had been shipping products to the US in anticipation of the higher tariffs coming into play. The reserves that arrived at lower duty will temporarily insulate the company from the higher prices that it will need to pay for the new shipments that start coming under the revised tax rates,” one of the sources said.
The US is one of the biggest markets for sales of iPhones and other products of Apple and there are fears that if the company passes off the entire duty burden on the customers, there will be a slowdown in consumer demand as well as significant reduction in the company’s margins.
“Any price hike to offset this impact cannot be limited to just the US market, but will have to be taken across key global regions, including India. Such a step can only be taken once the company makes a full assessment of the supply chain and manufacturing locations, the stipulated tariffs for those countries, and how to balance the production from various regions to provide a cushion to shipments into the high-tax US market,” the source said.
Trump’s tariff announcements may end up giving India a larger share in global smartphone production from Apple, though a confirmed word will be out only once America concludes its negotiations with various countries to fix the final rates.
Apple, which nearly dominates India’s smartphone export shipments of roughly $9 billion to the US, will find expansion in India more attractive, considering that tariff on New Delhi currently stands at 26%, compared to the peak duty of 54% on China (it primarily makes iPhones in India and China).
Apple’s warehouses in the US remain “sufficiently stocked up for the next few months” with products shipped from key manufacturing locations at a “frenetic pace” to beat the start of the higher tax regime, that begins with a baseline 10% tariff from April 5 and thereafter with the addition of respective reciprocal tariffs (different for each country) from April 9.
“Factories in India and China and other key locations had been shipping products to the US in anticipation of the higher tariffs coming into play. The reserves that arrived at lower duty will temporarily insulate the company from the higher prices that it will need to pay for the new shipments that start coming under the revised tax rates,” one of the sources said.
The US is one of the biggest markets for sales of iPhones and other products of Apple and there are fears that if the company passes off the entire duty burden on the customers, there will be a slowdown in consumer demand as well as significant reduction in the company’s margins.
“Any price hike to offset this impact cannot be limited to just the US market, but will have to be taken across key global regions, including India. Such a step can only be taken once the company makes a full assessment of the supply chain and manufacturing locations, the stipulated tariffs for those countries, and how to balance the production from various regions to provide a cushion to shipments into the high-tax US market,” the source said.
Trump’s tariff announcements may end up giving India a larger share in global smartphone production from Apple, though a confirmed word will be out only once America concludes its negotiations with various countries to fix the final rates.
Apple, which nearly dominates India’s smartphone export shipments of roughly $9 billion to the US, will find expansion in India more attractive, considering that tariff on New Delhi currently stands at 26%, compared to the peak duty of 54% on China (it primarily makes iPhones in India and China).
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