SUMMARY
Import tax on printed circuit boards (PCBs) has increased to 20% from 10%
The plant will also give wings to the Make in India initiative
PCBs of many of Apple’s smartphones are assembled in China
In her Budget 2020 speech, Finance Minister Nirmala Sitharaman announced that the government has increased the import tax on printed circuit boards (PCBs) to 20% from 10%, which is now going to make most electronic products imported by India a bit more expensive. In response, the smartphone maker Apple is now planning to set up a PCB assembling plant in India to lower down the costs of its smartphones for the second-largest smartphone market, according to Reuters.
Besides selling Apple smartphones for a bit cheaper price in India, the plant will also give wings to the Make in India initiative of the current government, thereby creating more jobs in the country.
As of now, most of the PCBs of many of Apple’s smartphones are assembled in China by Taiwan’s Wistron Corp. And now, Wistron is reportedly planning to set up a plant near Bengaluru to assemble PCBs of Apple iPhone 7 and 8 models.
Wistron is already assembling Apple’s low-priced SE model in Bengaluru since 2017 and has recently started assembling iPhone 6S and 7 at the same facility. However, this will be the first time when Wistron will start assembling PCBs for Apple in India. PCBs are the core of a smartphone and costs approximately half of the total value of an electronic device.
Further, sources close to the development said that the new facility will start assembling from April 2020. The facility will have the capacity to manufacture 8 Mn iPhone devices annually and some of the models assembled there will also be exported to other countries, sources told Reuters.
Moreover, this setting up of a facility in Bengaluru is also a part of the $422.12 Mn investment proposal of Wistron to the Karanata government that came in 2018.
On the other hand, Wistron’s rival Foxconn also started to assemble Apple iPhone XR models in India in 2019. Foxconn also assembles PCBs for iPhone XR in India as well. While Apple still relies on China for manufacturing most of its devices, the company has recently started to look at other options amid the wake of US-China trade tensions.
Recently, Apple announced that it has reported double-digit growth in terms of revenue from India in the October-December 2019 period, its first quarter in the fiscal year 2020. Moreover, Apple had also committed to investing INR 1,000 Cr in India to set up its first online retail platform and open three company-owned stores across major cities in the next two to three years.
