India has urged iPhone-maker Apple to expand its local manufacturing ecosystem to generate annual production output worth $50 billion over the next 5-6 years. The Narendra Modi-led government wants Apple to prepare for manufacturing Macbooks, iPads, AirPods and Apple Watches.
In a recent high-level meeting with Apple India’s senior leadership, top government officials reportedly asked the iPhone-maker to develop India as its global sourcing base similar to that in China.
The government wants Apple to export “fully-built products” worldwide, the Times of India reported citing officials. The report added that the meeting was attended by senior members of the government, including a top minister.
During the meeting, Apple was informed that the Indian government was “setting up an enabling environment” to give a massive push to electronics manufacturing in the country, with a big eye on exports.
“The enabling environment includes production-linked incentive (PLI) schemes to encourage companies to invest in, and grow, manufacturing in India. Also, capital subsidy plans are being given out, such as the one allotted for kickstarting semiconductor manufacturing where the government has extended support of $10 billion for those willing to invest,” a top source was quoted as saying by the daily newspaper.
Currently, Apple makes iPhones through Foxconn and Wistron in India, while its third partner, Pegatron, is most likely to start iPhone production by next month. All three partners were approved under the production-linked incentives (PLI) scheme for mobile manufacturing.
Both Foxconn and Wistron have started exporting iPhones from their India facility, but the numbers aren’t very high. Notably, Apple partners are yet to begin producing its latest iPhone 13 in India, even as it never attempted manufacturing iPhone’s Pro variants.
Last week, Apple placed an India plant of Taiwanese electronics contract manufacturer Foxconn on probation, following concerns over food safety and accommodation at the unit. It had previously placed Wistron on probation after the latter found lapses in its salary payments to workers,
“Foxconn and Wistron are already manufacturing for Apple in India at a top rate, though the volumes are “near negligible” when compared to what they manufacture in China.” the report added.
Notably, Apple achieved revenues of $3 billion in India in fiscal 2020-21, registering a growth of 68%. Market trackers estimate Apple’s iPhone shipments to cross a record 5 million units in 2021, from 3.1 million in 2020, or a 3% market share in India.
The Indian government is currently preparing a plan to roll out new production-linked incentive schemes for notebook and wearable production to sweeten the incentives. These schemes will specifically target players like Apple and Samsung.
“It is expected that with a more comprehensive incentive policy for notebooks and a scheme for hearables and wearables, the company may look at making new products (beyond iPhones) inside India,” the publication reported citing sources.
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