Apple's Strategy to Circumvent Tariffs
Apple has strategically increased its production in India to mitigate the impact of U.S. tariffs on Chinese imports, notably affecting the cost of iPhones.
Key Strategies and Actions
- Chartered Cargo Flights: Apple chartered flights to transport 600 tons of iPhones from India to the U.S., equating to approximately 1.5 million units.
- Customs Clearance Optimization: Apple successfully lobbied Indian airport authorities to reduce customs clearance time at Chennai airport from 30 hours to six hours, creating a "green corridor" similar to models in Chinese airports.
- Production Increase: Apple aimed for a 20% increase in production by adding workforce and extending operations at Foxconn India's plant to include Sundays.
Impact of Tariffs
- The tariff on Chinese imports was set at 125%, significantly higher than the 26% on Indian imports, which was temporarily paused.
- Without these measures, the price of a top-end iPhone in the U.S. could have surged from $1,599 to $2,300.
Manufacturing and Export Details
- Apple's diversification plan positions India as a key manufacturing hub, with Foxconn and Tata as primary suppliers.
- Foxconn's shipments from India to the U.S. saw significant increases in January and February, with major offload points in Chicago, Los Angeles, New York, and San Francisco.
This comprehensive strategy highlights Apple's efforts to maintain U.S. market stability amidst fluctuating tariffs and showcases India's growing role in Apple's global supply chain.
