Apple looking to invest massively in iPhone production in India over the next 5 years

apple shift into intida 5 years rect

Apple is looking to significantly expand its production capabilities in India. Apple senior executives have reportedly met with Indian government officials about moving almost 1/5th of its iPhone production from China, into India. All this according to a new report by ET, which says:

Several meetings between Apple‘s senior executives and top ranking government officials over the last few months have paved the way for the iPhone maker examining the possibility of shifting nearly a fifth of its production capacity from China to India and scaling up its local manufacturing revenues, through its contract manufacturers, to around $40 billion over the next five years, say officials familiar with the matter.

If the transition does take place, it would make the iPhone India’s largest exporter and would equate to around $40 billion worth of smartphones per a senior government official:

Several meetings between Apple‘s senior executives and top ranking government officials over the last few months have paved the way for the iPhone maker examining the possibility of shifting nearly a fifth of its production capacity from China to India and scaling up its local manufacturing revenues, through its contract manufacturers, to around $40 billion over the next five years, say officials familiar with the matter.

However, Apple has recently been more concerned about the Indian governments recently announced PLI plan, a framework to increase local smartphone handset production and attract foreign investment. The framework goes in action on August 1st of this year, and Apple is expected to formally sign up next week.

But, according to a source near the company, Apple has concerns over the value breakdown of the plan in relation to its production capacities in China:

Several meetings between Apple‘s senior executives and top ranking government officials over the last few months have paved the way for the iPhone maker examining the possibility of shifting nearly a fifth of its production capacity from China to India and scaling up its local manufacturing revenues, through its contract manufacturers, to around $40 billion over the next five years, say officials familiar with the matter.

Tim Cook met with Prime Minister Narendra Modi in December of 2019, which initially fueled the company’s pursuit of the Indian economy. Shortly after, Apple announced it was shifting a large portion of its iPhone XR production into the country, quickly expanding with a new chip team.

“India isn’t a big market for Apple as the company sells only a fraction of its total output in India. It is actually looking at India as a base to manufacture and export, essentially diversifying its production out of China,” the official said.

Apple’s presence in the Indian market is relatively low compared to the competition. The latest market data shows that Apple has sold around 1.5 billion iPhones in the country, 0.5 billion of which is produced locally. Apple has numerous benefits to move its production into India. Firstly, it would help drive down costs for products in the region which has notoriously been high due to taxesand back-end expenses.

2nd, the company has bee under increased strain ever since the COVID-19 pandemic broke in China, the current hub of its production capabilities. Apple is slowly realizing that’s its pure reliance on the Chinese economy is not a secure business model, with India, Vietnam, and other southeast Asian countries on its radar.

Default image
Sami
Sami started falling in love with Apple in 2010 with the iPhone 4S. As a registered developer, he deeply admires the world of Apple. Sami is an aspiring journalist, writer, and actor. He also has devoted his life to sharing his passion and knowledge with others around the world.