TL;DR
- Cupertino-based tech giant Apple shipped five planeloads of iPhones & other products from India to the US in 3 days
- The move was to avoid new tariff rules announced by Donald Trump.
- This will ensure steady prices temporarily & help delay global price revision.
In a rapid response to mitigate the effects of new US tariffs, Apple dispatched five cargo planes filled with iPhones and other products from India to the United States within three days, as confirmed by senior Indian officials to TOI’s Sidhartha. These shipments, which occurred in the last week of March, were made before the implementation of a 10% reciprocal tariff by the Trump administration, effective April 5.
A report by The Times of India claims that Apple does not intend to raise retail prices in India or elsewhere shortly, despite the introduction of new tariffs. To mitigate the effects, the company has swiftly transferred inventory from its manufacturing facilities in India and China to the United States, even though this period is typically characterized by lower shipping activity. “Manufacturing plants in India, China, and other significant locations have been dispatching products to the US in preparation for the impending higher tariffs,” one source revealed.
Apple’s advance stockpiling before the tariff changes has allowed the company to keep its prices stable for the time being. According to a source, “The inventory that was acquired at reduced duties will provide a temporary buffer against the increased costs associated with new shipments that will be subject to the updated tax rates.” Reports indicate that Apple’s warehouses in the United States are sufficiently stocked for the upcoming months.
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A report from Pankaj Doval of TOI also claims that this strategy allows Apple to postpone any global price adjustments until a comprehensive evaluation is completed. The source noted, “Any increase in prices to counter this effect cannot be confined to the US market alone; it will need to be implemented across major global regions, including India.” The company is presently analyzing the effects of different tariff structures at its manufacturing sites to modify its supply chain as needed.
The United States continues to be a crucial market for Apple’s products, including iPhones. The company is making efforts to prevent transferring increased costs to consumers, as this could impact both demand and profit margins.
The recent surge in exports from India extended beyond Apple. Exports of gems and jewellery to the US from Mumbai skyrocketed six times, reaching $344 million between April 1 and 4, compared to $61 million during the same period last year. Additionally, apparel exports were expedited. “We observed a notable rise in exports during the final week of March,” stated Kirit Bhansali, chairman of the Gems & Jewellery Export Promotion Council.
To quote Ajay Sahai, director general of FIEO, “There was growth in sectors where air transport to the US was feasible. I anticipate exports will exceed $40 billion in March 2025.” In March 2024, exports amounted to $41.6 billion.
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India’s total exports of goods and services are projected to have surpassed $800 billion for the fiscal year ending in March, despite a 3% drop in goods exports, which are estimated at approximately $437 billion. Commerce and Industry Minister Piyush Goyal previously encouraged exporters to expedite their shipments following a slowdown in February, during which exports decreased by 11%.
Changes in US tariffs may also impact Apple’s manufacturing approach. Currently, India faces a 26% reciprocal tariff, compared to tariffs as high as 54% on Chinese products, potentially positioning India as a more significant component of Apple’s global production network. The company already represents the majority of India’s nearly $9 billion in smartphone exports to the US. However, any decisions regarding production relocations will likely hinge on the finalization of US tariff agreements with different nations.
While inventories are currently stable, exporters caution that the advance shipment of goods may lead to a decline in trade volumes during the April-June quarter. Trade statistics for March are anticipated to be published on April 15.
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