In a significant twist to the global job market, a recent report by the Georgia Tech Research Institute (GTRI) has shed light on the tit-for-tat dynamics between the US and India in the realm of employment and economic shifts. As India faces the prospect of losing tens of thousands of jobs due to Apple’s potential shift of production to the US, the numbers tell a different story – one that highlights the substantial costs Apple may incur in making this move. With the tech giant’s decision poised to impact the Indian economy, a closer examination of the GTRI report reveals a complex web of economic interests, trade policies, and the global implications that come with it.
The Cost of Relocation: Apple’s iPhone Shift from India to the US
If Apple decides to shift its iPhone manufacturing from India to the United States, the company will lose significantly more than India, according to Ajay Srivastava, founder of Global Trade Research Initiative (GTRI). The report highlights that India’s gains from assembling iPhones remain limited.
India’s Limited Gains from iPhone Manufacturing
The country earns around USD 30 for each iPhone manufactured locally and exported, but much of this amount is returned to Apple through the government’s Production Linked Incentive (PLI) scheme. In addition, India has been lowering tariffs on key smartphone components at Apple’s request, which has put pressure on domestic companies trying to build a local supply chain.
"For every iPhone sold at around USD 1,000 in the US, India’s share is less than USD 30. Yet, in trade data, the full USD 7 billion export value adds to the US trade deficit," Srivastava said.
India’s role in iPhone manufacturing is primarily limited to final assembly, which involves low margins but creates employment. If Apple relocates this segment, India would lose some entry-level jobs but might be pushed to shift focus toward advanced manufacturing in areas like semiconductors, batteries, and display technologies.
"If Apple’s assembly moves out, India will be forced to stop propping up shallow assembly lines and instead invest in deeper manufacturing—chips, displays, batteries, and beyond," Srivastava added.
The Economic Impact of Shifting iPhone Production
The report breaks down the value chain of a USD 1,000 iPhone. Only USD 450 goes toward the physical device. U.S. firms like Qualcomm and Broadcom receive USD 80, Taiwan gets USD 150 for chip fabrication, South Korea earns USD 90 for OLED and memory components, and Japan contributes USD 85 for the camera. Germany, Vietnam, and Malaysia account for another USD 45. India and China receive just USD 30, which is less than 3% of the total value, despite being key locations for final assembly.
Manufacturing, although low in value addition, is significant for employment. Approximately 3 lakh workers are involved in China, and India employs around 60,000 in Apple’s manufacturing chain.
"This is precisely the segment of the supply chain Trump wants to bring back to the U.S.—not because it’s high-tech, but because it delivers jobs," Srivastava said.
Relocating assembly to the U.S. would sharply raise Apple’s costs. In India, the average assembly worker earns about USD 290 per month. Under U.S. minimum wage laws, this could increase to USD 2,900—a 13-fold jump. This would raise the assembly cost per iPhone from USD 30 to USD 390. Apple’s profit per device could fall from USD 450 to USD 60, unless it raises iPhone prices, potentially affecting American consumers.
The report questions whether Apple CEO Tim Cook would choose to reduce profitability to support U.S. manufacturing or continue to take decisions based on commercial viability. It also raises concerns about broader trade dynamics. While former U.S. President Donald Trump has pushed for shifting jobs back to the U.S., the report notes that 85% of Apple’s iPhones are still made in China, compared to only 15% in India.
The Reallocation of Jobs in India
The report suggests that Trump’s recent statements could be aimed at gaining leverage over India in ongoing trade talks. If Apple relocates its iPhone manufacturing to the U.S., India may lose some entry-level jobs, but the country could be pushed to shift focus toward advanced manufacturing in areas like semiconductors, batteries, and display technologies.
The Shift from Shallow Assembly Lines to Deeper Manufacturing
According to the GTRI report, India’s gain from assembling iPhones remains shallow. India earns around $30 for each iPhone manufactured locally and exported, but much of this amount is returned to Apple through the government’s Production Linked Incentive (PLI) scheme. Furthermore, India has been lowering tariffs on key smartphone components at Apple’s request, which has put pressure on domestic companies trying to build a local supply chain.
However, if Apple relocates this segment, India would be pushed to shift focus toward advanced manufacturing in areas like semiconductors, batteries, and display technologies. This could be an opportunity for India to move up the value chain and focus on more advanced manufacturing, competing with countries like China and the US.
India’s Limited Role in iPhone Manufacturing
The report highlights that India’s role in iPhone manufacturing is primarily limited to final assembly, which involves low margins but creates employment. For every iPhone sold at around $1,000 in the US, India’s share is less than $30. Yet, in trade data, the full $7 billion export value adds to the US trade deficit.
The report breaks down the value chain of a $1,000 iPhone. Only $450 goes toward the physical device. US firms like Qualcomm and Broadcom receive $80, Taiwan gets $150 for chip fabrication, South Korea earns $90 for OLED and memory components, and Japan contributes $85 for the camera. Germany, Vietnam, and Malaysia account for another $45. India and China receive just $30, which is less than 3% of the total value, despite being key locations for final assembly.
The Politics of Trade: Trump’s Motivations and Leverage
Trump’s push for US manufacturing can be seen as a genuine concern for jobs or a bargaining chip in trade talks. The leverage Trump seeks to exert over India in trade negotiations could have significant implications for both countries.
According to Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), Trump’s recent statements could be aimed at gaining leverage over India in ongoing trade talks. The report notes that 85% of Apple’s iPhones are still made in China, compared to only 15% in India.
The global trade dynamics are complex, and the shift in iPhone production would affect international trade significantly. The report raises concerns about the broader trade dynamics and the potential consequences of relocation.
The Future of iPhone Production and Trade
The analysis and implications of the GTRI report highlight the potential consequences of Apple’s relocation. The practical aspects of relocation would require significant investment and a reevaluation of Apple’s supply chain.
If Apple decides to shift production to the US, the company stands to lose significantly more than India. The report highlights that relocating assembly to the US would sharply raise Apple’s costs. In India, the average assembly worker earns about $290 per month. Under US minimum wage laws, this could increase to $2,900—a 13-fold jump. This would raise the assembly cost per iPhone from $30 to $390. Apple’s profit per device could fall from $450 to $60, unless it raises iPhone prices, potentially affecting American consumers.
The report questions whether Apple CEO Tim Cook would choose to reduce profitability to support US manufacturing or continue to take decisions based on commercial viability.
Conclusion
In a recent report by the Georgia Tech Research Institute (GTRI), India may face job losses if Apple decides to shift its manufacturing operations to the United States. However, the report reveals that the cost of such a shift for Apple would be far more significant than any potential losses for India. The study highlights that India’s manufacturing sector is heavily reliant on foreign investment, particularly from the electronics industry, which is dominated by Apple. While India’s government is eager to attract foreign investment, a shift in Apple’s manufacturing operations could have severe consequences for the country’s manufacturing sector.
The significance of this topic lies in its implications for the global electronics industry and the role of emerging markets in the supply chain. The GTRI report sheds light on the complex relationships between technology companies, governments, and local economies. If Apple were to shift its manufacturing operations to the US, it would not only affect India’s manufacturing sector but also have broader implications for the global electronics industry. The report highlights the need for policymakers and industry leaders to consider the far-reaching consequences of such a shift.
As India and the US continue to engage in a high-stakes competition for foreign investment, the GTRI report serves as a timely reminder of the complexities involved. As the global electronics industry continues to evolve, one thing is clear: the fate of thousands of jobs in India hangs in the balance. While Apple’s decision may seem like a classic case of corporate strategy, the report makes it clear that the stakes are much higher, and the consequences of such a shift would be felt far beyond the borders of India and the US.