Summary
- India has demanded zero tariffs on electronics exports to the US in final trade negotiations before the July 9 deadline.
- Trump has warned of 25% tariffs on Apple if it sells iPhones made in India or elsewhere abroad in the US.
- Despite trade tensions, Apple and Foxconn are expanding production in India, signaling deeper investment ties.
Modi’s Make-in-India Meets Trump’s Trade Barriers
With the clock ticking toward the July 9 deadline on reciprocal tariffs, India has made a bold pitch for a zero-tariff regime on electronics exports to the United States. The move aligns with India’s larger ‘Make in India’ ambitions and its Trump’s Liberation Day Tariffs: Why He Spared Adversaries and Penalized Alliesefforts to emerge as a global electronics manufacturing hub. However, the push comes at a politically sensitive time as US President Donald Trump continues to escalate his trade rhetoric, particularly against companies like Apple that manufacture abroad.
India’s negotiating teams, currently in Washington, are trying to lock in a bilateral trade deal that would extend the 90-day pause in tariff hikes. According to Indian officials, the zero-duty ask is critical to unlocking India’s tech export potential. Yet, the Trump administration has remained non-committal, citing internal constraints like the lack of a valid Trade Promotion Authority (TPA), which limits the White House’s ability to lower tariffs unilaterally.
📌 Reports indicate India is toughening its position.
— The Tathya (@_TheTathya) June 3, 2025
It’s demanding the removal of Trump’s 10% baseline tariffs, which apply to all imports, even after trade deals (e.g., US-UK deal last month).
👉 India also wants the “Made in India” rule of origin relaxed from 60% to 35%… pic.twitter.com/qZVLoywoJM
Apple, Foxconn, and the India Dilemma
- Trump has openly opposed Apple’s plans to expand manufacturing in India for US-bound products.
- A proposed 25% tariff could apply to iPhones made in India and sold in the US.
- Despite this, Foxconn is investing $1.49 billion in its Indian unit, boosting local production.
Trump’s threat to slap tariffs on Apple if it sells India-made iPhones in the US stands in sharp contrast to market realities. Apple, whose dependence on China has long drawn political scrutiny, now views India as a vital hedge. With nearly 15% of global iPhone production already happening in India, the company’s contract manufacturer Foxconn has doubled down by announcing a $1.49 billion investment in Tamil Nadu.
Trump, however, remains unconvinced. He told Fox News that Apple should manufacture in the US if it wants to sell without trade penalties. Experts, however, note that moving Apple’s entire supply chain to the US is not feasible given the absence of an established component ecosystem and labour cost advantages that markets like India and Vietnam provide.
Trade Talks and Political Optics
- US flagged non-tariff barriers and high duties in India but has not committed to India’s demands.
- Lack of TPA means tariff reductions from the US side lack long-term legal standing.
- Indian negotiators remain optimistic but cautious as deadline nears.
While Trump signals tough love on trade, India remains diplomatically patient, seeking to balance strategic autonomy with economic pragmatism. The current trade negotiations, insiders say, will likely result in a partial deal that covers only executive-level tariff relief. This raises concerns over the long-term sustainability of such an agreement, especially in a volatile election year in the US.
India’s push for zero-duty access isn’t just about electronics; it’s about setting a precedent for a broader, rules-based trade framework between two of the world’s largest democracies. However, with Trump preferring to govern trade through executive muscle and letter diplomacy, the path ahead remains as unpredictable as ever.
A Future Hinged on Factory Floors
India’s zero-tariff demand reflects its growing confidence as a tech manufacturing hub, bolstered by Apple’s shift from China. But Trump’s retaliatory tariff threats on foreign-made electronics, especially from India, risk undercutting this momentum. As the July 9 deadline nears, the outcome of this trade standoff could reset expectations for future US-India commercial ties, particularly in the fast-growing electronics sector.
