Apple (NASDAQ:AAPL) slides 3.02% as Wedbush says a U.S.India trade deal could supercharge its iPhone supply chain.

Wedbush Securities kept its Outperform rating and $270 price target on AAPL, noting that India’s technology workforce, high engineering talent, and supply chain infrastructure position it as a threat to China’s dominance and a top beneficiary of any deal.

AAPL fell 3.02% this morning after reports that U.S. negotiators may close a wide-ranging agreement with India in the coming weeks. The note highlighted that India-origin iPhone production would cushion Apple from the 25% tariff President Trump threatens on devices not made in America by late June.

The analysis comes amid rising political noise: Trump’s Truth Social post on Friday reiterated his demand that iPhones sold in the United States will be manufactured and built in the United States or face a Tariff of at least 25%, raising the stakes for Cook’s strategy.

On Apple’s Q2 earnings call, CEO Tim Cook told analysts he expects the majority of iPhones sold in the U.S. will have India as their country of origin, while Vietnam will handle most iPad, Mac, Watch and AirPods output. That diversification drive follows China-focused production surges that have drawn White House scrutiny.

Investors should care because securing a trade pact with India could deepen Apple’s margin buffer, accelerate onshore production and lessen tariff uncertainty ahead of peak iPhone season.

With markets watching trade headlines, investors will eye any U.S.India deal announcements in the coming weeks as a key catalyst before Trump’s end-of-June tariff deadline.

This article first appeared on GuruFocus.