Apple may take a bigger bite of India's manufacturing pie

[Sachin200]

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 this happens, iPhone maker could become India's largest exporter, say experts.

"We expect 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 production-linked incentive (PLI) scheme," a senior government official told ET.

Cupertino-based Apple didn't respond to ET's emailed queries.

However, sources close to the company's plans said there were some irritants in the government's ambitious PLI scheme - recently announced to incentivise local handset manufacturing and exports - which still needed to be ironed out.

"There are some problems with some of the clauses. For instance, valuing the entire plant and machinery already in use in its plants across China and other places at 40% of that value and the extent of the business information sought under the scheme are some of the irritants," a person said.

Govt keen to address concerns

Officials in the government say they will look into all the concerns as the Centre is focussed on bringing hitech manufacturing to India. Prime Minister Narendra Modi met top executives of Apple, Samsung and homegrown phone maker Lava on December 28 last year, which kick-started the process.

“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.

Currently, Apple sells phones worth some $1.5 billion in India, of which less than $0.5 billion is locally manufactured, and has market share of some 2-3%. In contrast, Apple is a top investor in China. In 2018-19, it produced merchandise valued at $220 billion in China, of which it exported goods worth $185 billion, according to industry experts. It directly and indirectly employs about 4.8 million people there.

According to market research firm IDC, Apple in 2018-19 held a 38% market share of global handset exports, followed by Samsung with a 22% share.

India is looking for a bigger slice of the global exports pie, another senior government official said. The PLI scheme had been designed to address disadvantages global supply chains faced in India vis-à-vis say China and Vietnam.

Companies may apply soon

“…we are expecting companies to start applying from next week, when the guidelines are out and then the scheme kicks in from August 1. This is the fastest ever planning to execution undertaken by the Indian government,” another government official told ET.

The PLI scheme for large-scale electronics manufacturing was notified on April 1 and 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.

“We realised companies weren’t relocating manufacturing to India because there were disabilities of almost 10%, so PLI addresses about 6% disabilities, the RoDTeP scheme another 0.27%, and the corporate rate tax cuts address the balance,” said the second official. RoDTeP or Remission of Duties and Taxes on Exported Products is another scheme to incentive exports.

The official expects applications from Apple’s component and contract manufacturers, Samsung and a clutch of Chinese investors such as Vivo and Oppo in the next few weeks for the PLI scheme

[Sachin200]

@JaiTDP time to thank cbn if it happens 

 

[Prince_Fan]

most powerful country India...evadaina mana daggaraki ravalsindey

[JaiTDP]

5 minutes ago, Sachin200 said:

@JaiTDP time to thank cbn if it happens 

 

+10. 
 

 

[CH_Desi]

Nice, hopefully Sricity can be a good contender for this.

[Assam_Bhayya]

hammayya Apple product meedha China ani lekhapothe chalu. . . . 

When i buy photography gear, whenever i see Made in china, sheet anipisthadi. . . Taiwan/Malaysia/Japan/Thailand is fine. . . 

similarly on clothes. . even Bangladesh, Pakistan, Srilanka,  Honduras, salvador unte different feeling. . . China ani chuthe matram adhi macys lo konna lite anipisthadhi 

[Hydrockers]

Aa UP bihar lanti areas lo pettandi
Akkada iana develope avvudi employment vachi

[Hydrockers]

Aa UP bihar lanti areas lo pettandi
Akkada iana develope avvudi employment vachi

[Sachin200]

8 hours ago, Hydrockers said:

Aa UP bihar lanti areas lo pettandi
Akkada iana develope avvudi employment vachi

Vizag ayitey Baguntundhi for Andhra , good investment 

 

[Assam_Bhayya]

12 minutes ago, Sachin200 said:

Vizag ayitey Baguntundhi for Andhra , good investment 

 

+1

Port is a plus for logistics . . Port ki kuda advantage 

[CH_Desi]

5 minutes ago, Assam_Bhayya said:

+1

Port is a plus for logistics . . Port ki kuda advantage 

Andhra lo aithe sricity lo pette chances ekkuva anukunta, Vizag kanna.

[Sachin200]

2 minutes ago, CH_Desi said:

Andhra lo aithe sricity lo pette chances ekkuva anukunta, Vizag kanna.

Andhra vastey matuku sandranna PPT Loki veltundhi , 2014-19 oka random year petti appudey discuss chesa antadu