Making iPhones in India is a key element of Apple’s efforts to reduce its manufacturing dependence on China, and a new report indicates that the company may be able to cut the cost of doing so.
The Indian government is reportedly planning to offer at least $2.7B in support for local manufacturing, which could reduce iPhone production expenses in the country …
Apple’s ramp-up of iPhone production in India
The need for Apple to lessen its dependence on China as a manufacturing center has been clear for many years, and the pandemic drove home the risks of concentrating as much as 80% of the world’s iPhone production in a single plant.
Apple has long targeted India as its primary second manufacturing home. We’ve been hearing ambitious reports for some time now – that half of all iPhones could be made in India by 2027 – though actual progress has been slower.
Things stepped up significantly last year. Bloomberg reported back in April that around one in seven iPhones were made in India, but the production of flagship models had always lagged significantly behind due to the advanced manufacturing processes needed. That changed with the iPhone 16, with production in India starting within weeks of launch.
New government support
Two of the ways the Indian government has encouraged local manufacturing of smartphones is by offering tax subsidies, as well as concessions on import tariffs for components. Bloomberg reports that both initiatives are about to be boosted.
India’s government is considering fresh subsidies for electronic component-makers and cutting tariffs on imports to help boost local manufacturing, especially of smartphones made by companies like Apple Inc.
The Ministry of Electronics and IT proposed giving manufacturers of components like batteries and camera parts at least 230 billion rupees ($2.7 billion) in support, according to people familiar with the matter, who asked not to be identified as the discussions are private.
The ministry also recommended reducing tariffs on some electronic components, an industry demand that will help bring down production costs, one of the people said.
A decision is expected to be announced during next month’s budget.
Apple is thought to be aiming to begin production of the iPhone 17 simultaneously in China and India.
Photo by Jainam Sheth on Unsplash
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