SUMMARY
No concrete plans made yet but talks underway with Indian officials, says a media report
Apple is set to surpass Samsung as the biggest exporter of smartphones by the next fiscal year
Apple shipped close to 1.2 Mn India-manufactured smartphones in the second quarter of 2022
Apple executives are reportedly in talks with officials of the Indian government to move some of the iPad’s production from China to the country.
Sources privy to the development told CNBC that while no concrete plans have been made yet, discussions were currently underway on the matter. The move is expected to further expand Apple’s production capabilities in India.
In the same breath, sources added that a lack of highly skilled labour in the country could slow down Apple’s India plans.
Interestingly, this comes on the heels of a Financial Express report that Apple was expected to surpass South Korean smartphone major Samsung as the biggest exporter of smartphones by the next fiscal year.
As per the report, Apple logged in exports worth $2.2 Bn between April and October, while Samsung’s exports accounted for $2.8 Bn worth of shipments during the same period.
The move to shift some of its iPad production to India has largely been attributed to the tech giant’s bid to diversify its supply chain away from neighbouring China. China, which has so far been the smartphone manufacturer’s paradise, has been marred by multiple pandemic lockdowns and raging counter protests.
The result has led to disruptions in supply chains and raised major challenges regarding retail, logistics and shipment of goods to the US.
Earlier last week, reports emerged that Apple was actively looking to move production, out of China, to other Asian nations such as India and Vietnam.
Apple In India
India has emerged as a new base for production of Apple products. The country currently produces the iPhone SE, iPhone 12, iPhone 13 and the basic model of iPhone 14. The Pro models sold in the country are largely imported from abroad.
The manufacturing facilities for Apple products in the country are largely led by three players – Wistron, Foxconn and Pegatron.
The factor largely seen driving the move to India has been the government’s production linked incentive (PLI) scheme for large-scale electronics manufacturing companies.
As per a report, Apple shipped close to 1.2 Mn India-manufactured smartphones in the second quarter of 2022, up 94% year-on-year (YoY).
On similar lines, brokerage firm JP Morgan estimates that Apple may manufacture one out of four iPhones in India by 2025. Foxconn and Wistron, together are expected to manufacture iPhones worth INR 47,000 Cr in FY23 in India. In comparison, the two players manufactured iPhones worth INR 10,000 Cr during the last fiscal year.
The incentives under the PLI scheme have also attracted the interest of homegrown conglomerates. This comes amid reports that Tata Group was in talks with Apple vendor Wistron to buy its manufacturing facility in Karnataka for INR 4,000-5,000 Cr.
But, while officials pitch the ‘Make in India’ initiative, the country faces stiff competition from Vietnam which has also emerged as a major hub of smartphone production. Now, as the country looks to woo more players, it remains to be seen as to what degree will Apple shift its capacities to India.
