Apple to Shift it’s 20% Production from China to India
Good news for Tech lovers in India!
According to recent reports from various sources, Apple has been discussing ramping up its production in India in the fiscal years 2020–21, 2021–22 and 2022–23 with reaching a peak of $5B till 2023. Now, that was the deal in discussion till January 2020. Now, after the rise of COVID-19, almost every other tech company saw a fall in production of their products, with some companies even delaying their line-up to five or six months. It is an open fact that majority of the companies have their production units set up in China because of various reasons. Cheap labour, lower cost of production, lower cost of raw materials and the excellent export system being some of them. But the companies saw what happens when all their eggs are kept in one basket, and especially in situations like this where the whole world is at stake. Cases like the current global pandemic often force the upper management of firms to make a change in their production strategies. Diversifying their manufacturing mechanisms will definitely lead to more balanced pricing of the products, with increased branch-spread at an additional advantage (given they can handle the costs in the initial years while setting up).
One such company which has taken a severe hit on its production and revenue is Apple. Now the big company was already producing some of its products in India, but things are changing for good. Apple is examining a proposal to shift nearly one-fifth of its production capacity from China to India and ramp up its local manufacturing capabilities through its contract manufacturers and achieves $40 billion worth of production over the next five years. The report quoted top-ranking Indian government officials as saying that they expected Apple to produce up to $40 billion worth of smartphones, mostly for exports through its contract manufacturers Wistron and Foxconn, availing the benefits under the recently unveiled production-linked incentive (PLI) scheme.
In March this year, the Union Cabinet had taken major decisions to enhance manufacturing in the electronic components, semiconductors and mobile segments including the launch of three different schemes — Production-linked incentive scheme (PLI) — Scheme for promoting manufacturing of electronic components and semiconductors’’ (SPECS)-Electronics Manufacturing Clusters (EMC) 2.0. The PLI scheme offers a production-linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including assembly, testing, marking and packaging (ATMP) units.
India has been attempting to build a robust domestic manufacturing sector in smartphones through a calibrated multiyear programme under which tariffs are introduced gradually on smartphone components, beginning with basic accessories such as chargers in 2016 and working up to touch panels.
Prime Minister Narendra Modi has met top executives of Apple, Samsung and homegrown phone maker Lava on December 28 last year, which kick-started the process of rolling out incentives to attract hi-tech manufacturing to India. Wistron is already making Apple’s low-priced iPhone SE model since 2017 in its Bengaluru unit. It currently assembles the iPhone 6S and 7 models there as well. Wistron’s second iPhone plant in Bengaluru will make iPhone 7 and 8 models, some of which will be exported.
It is no doubt the upcoming months may see a huge shift in Apple’s future economic planning. While that holds true for the Indian economy as well, but the government is famous for being strict with its rules and regulations and there is a very small chance they will change them anytime soon. But, let us hope for the best! No one knows what the future holds for us…
