We noticed you're browsing in private or incognito mode.

To continue reading this article, please exit incognito mode or log in.

Not an Insider? Subscribe now for unlimited access to online articles.

Business Impact

An Apple Manufacturing Plant in India? Don’t Tell Trump

The president-elect might want to bring manufacturing home to America, but Apple seems to have other ideas.

While Donald Trump is urging the American technology industry to shift manufacturing efforts to U.S. shores, it appears Apple didn’t get the memo: it’s apparently considering setting up a production plant in India.

The Wall Street Journal reports that Apple is in discussions with the Indian government about building products in the country. According to the newspaper’s sources, the company has stated its desire to manufacture there, but is seeking “financial incentives to move ahead.”

The plan makes sense. Apple doesn’t have much in the way of market penetration in India, partly because it doesn’t have its own stores there. But regulations in the country prevent foreign companies from setting up shop unless they purchase 30 percent of materials for manufacturing domestically. India isn’t geared up for delivering iPhone parts, so setting up a plant would solve the problem.

A modest facility—likely, as it would surely be more an assembly facility rather than anything else—would help Apple grow in India as it has in China, then. But the U.S. economy would see little benefit beyond Apple's stock price given its history of squirrelling money away off-shore rather than bringing it back to America and paying tax.

Even if Apple’s Indian manufacturing outfit were small, though, the president-elect would not be pleased. Trump has repeatedly called for U.S. technology companies to manufacture products on American soil. And he’s singled Apple out, saying that he will get it “to start making their computers and their iPhones on our land, not in China.” 

For its part, Apple cites not just cheaper labor but skilled workforces and flexible factories as key motivations for manufacturing overseas. And at any rate, if Apple did move its iPhone production to the U.S., the resulting iPhones would have to be more expensive.

U.S. tech employment did get a boost earlier this month, when Japanese telecom company Softbank committed to investing $50 billion in America, with plans to create 50,000 new jobs. That’s already starting to bubble through: the first investment on the list is $1 billion for Internet satellite firm OneWeb, which will create 3,000 jobs. Trump claimed credit for the SoftBank investment, though the money comes from a fund that was already being set up in collaboration with the government of Saudi Arabia—and may well have been destined for U.S. shores regardless.

Apple, meanwhile, is likely to tread its own path. In a leaked memo sent by Tim Cook to his staff, the CEO justified his presence at Trump’s tech roundtable last week. “It’s very important [to engage],” he explained. “Governments can affect our ability to do what we do. They can affect it in positive ways and they can affect in not so positive ways … And we engage when we agree and we engage when we disagree … We very much stand up for what we believe in … And we’ll continue to do so.”

Those are not the words of a CEO who plans to be bossed around by anyone if they can at all avoid it. Not even by a president.

(Read more: Wall Street Journal, TechCrunch, Reuters, “The All-American iPhone,” “Made in America: Asian Tech Giants Say They Will Expand U.S. Operations Under Trump,” "Apple’s Tax Game Is Hurting Economic Growth")

AI is here.
Own what happens next at EmTech Digital 2019.

Register now
More from Business Impact

How technology advances are changing the economy and providing new opportunities in many industries.

Want more award-winning journalism? Subscribe to Insider Basic.
  • Insider Basic {! insider.prices.basic !}*

    {! insider.display.menuOptionsLabel !}

    Six issues of our award winning print magazine, unlimited online access plus The Download with the top tech stories delivered daily to your inbox.

    See details+

    Print Magazine (6 bi-monthly issues)

    Unlimited online access including all articles, multimedia, and more

    The Download newsletter with top tech stories delivered daily to your inbox

You've read of three free articles this month. for unlimited online access. You've read of three free articles this month. for unlimited online access. This is your last free article this month. for unlimited online access. You've read all your free articles this month. for unlimited online access. You've read of three free articles this month. for more, or for unlimited online access. for two more free articles, or for unlimited online access.