Apple may be thinking of a creative way to get around President Donald Trump’s hefty tariffs on imported goods from China without bringing jobs back to the U.S. We’re hearing that the iPhone maker met with officials from the Indian government today to talk about making iPhones (maybe the iPhone 9?) in Bangalore.
It seems likely that the iPhones will mostly be destined for India, but what if the company could make them cheaper there and them import them to the U.S., dodging the import tariffs placed on goods made in China? Of course it all depends on what Trump does and how far he goes in taxing imported goods as he tries to bring jobs back to the U.S., but some believe he will be friendlier to India than to China.
Of course we’ve also heard that Apple might set up a factory in the U.S., appeasing the president’s call to bring jobs home.
Will the iPhone 9 be made in India?
A source reportedly told CNNMoney about the meeting, and an Indian Commerce Ministry official confirmed that they met with Apple executives. However, the agency declined to say what they were talking about. Apple also released a statement confirming that it had met with government officials in India to discuss “further expanding our local operations.” However, the company didn’t offer any additional details on the meeting.
The Times of India reported at the end of last month that Apple was looking into setting up a factory to build iPhones in Bangalore, which is the main tech hub in India. The newspaper added that the iPhone maker wanted to begin production by the end of 2017, which would mean that it could be up and running in time to produce the iPhone 9.
Opportunities for Apple in India
The “Made in India” campaign is aimed at getting more international companies such as Apple to set up shop there, and the iPhone maker is trying to gain a foothold in the fast-growing market that already contains more than 300 million smartphone users. Counterpoint projects that this year India will become the second biggest smartphone market in the world, behind only China and moving the U.S. into third place.
Apple also wants to tap into India’s middle class, which is also growing fast. However, most of the 1.3 billion Indian residents can’t even afford one of the company’s expensive iPhones, as Indians earn only about $1,500 per year, on average. One way to bring down the cost of its iPhones is to set up a factory in the country because it cuts the import taxes on the phones.
The government has been trying to work with international giants to bring more jobs in, but Apple appears to be trying to squeeze more out of the government than what officials are ready to offer. Some companies have managed to secure partial exemptions on a rule requiring international companies to source 30% of their raw materials in the country.