Apple Launches “Project Elephant” to Bypass U.S. Tariffs

Apple is ramping up production in India in a strategic move to reduce its reliance on China and sidestep the heavy tariffs imposed by the United States. This comes in response to the 125% import duty levied on Chinese goods under the administration of former President Donald Trump—a policy that poses a significant threat to Apple’s supply chain and pricing structure in the U.S.

At the heart of this effort is “Project Elephant,” a new initiative that involves Apple’s key manufacturing partner, Foxconn, building a major iPhone production facility in Bangalore, southern India. Spanning 1.2 million square meters, the factory is expected to begin operations later this year, making it the second-largest iPhone plant worldwide after Foxconn’s main hub in China.

By shifting more of its production to India, Apple aims to partially shield itself from the fallout of the ongoing U.S.–China trade tensions. The decision also allows the tech giant to benefit from significantly lower import duties. While the U.S. has imposed a 125% tariff on goods from China, Indian imports face only a 26% duty—temporarily reduced to 10% for a 90-day grace period. This difference offers Apple a substantial cost advantage.

Production at the new Bangalore factory is projected to double the number of iPhones manufactured in India to between 25 and 30 million units by the end of the year. Industry analysts estimate that a large portion of these devices will be shipped directly to the U.S. market. This influx could help Apple cushion American consumers from expected price hikes. Thirty million Indian-made iPhones would represent around 60% of Apple’s total annual shipments to the U.S.

Massive iPhone Airlifts to Beat Tariff Deadlines

Even before the new tariffs officially took effect, Apple had begun using its Indian supply chain to stockpile devices in the U.S. at pre-tariff prices. According to Indian newspaper The Hindu, as much as 1,000 tons of iPhones were flown to the U.S. and Hong Kong in March. Reuters reported a similar effort, citing 600 tons of smartphones shipped from the southern Indian city of Chennai in chartered planes—a volume equivalent to approximately 1.5 million iPhones.

To meet the tight shipping deadlines, Foxconn reportedly operated its existing iPhone facility in Sriperumbudur, Tamil Nadu, even on Sundays. Export data further underscores the rapid ramp-up: the value of iPhones shipped from India to the U.S. surged to $770 million in January and $640 million in February—months that coincided with Trump’s return to political spotlight. For comparison, monthly shipments in the prior quarter ranged between $110 million and $330 million.

The new factory is expected to boost these numbers even further. Local media outlets report that trial production runs are already underway in Bangalore, with Apple closely monitoring quality standards. Meanwhile, Foxconn is also preparing to begin production of Apple’s AirPods at another facility in Hyderabad later this month.

India Emerges as Apple’s Strategic Alternative to China

Apple’s pivot toward India is part of a larger strategy to diversify its manufacturing footprint amid escalating geopolitical risks. “We expect Foxconn, driven by Apple, to significantly expand its operations in India this year,” said Lori Chang, an analyst at Taiwanese research firm Isaiah Research. She predicts that India could account for 21–25% of global Apple production in 2025—up from 12–16% in the previous year. Initially, analysts had estimated Apple would only reach the 25% mark by 2027.

Apple first began producing iPhones in India in 2017, partnering with Taiwanese manufacturer Wistron before bringing Foxconn into the fold. In the early years, Indian factories were limited to assembling older iPhone models. However, since 2022, Apple has also been producing its latest-generation iPhones in the country. As of December 2023, Apple’s supplier list includes 14 manufacturing facilities located in India.

With “Project Elephant” and continued investment in Indian production, Apple is clearly positioning itself to weather the storm of global trade tensions while strengthening its foothold in one of the world’s fastest-growing economies.