March 23, 2023

Government asks Apple to make goods worth $50 billion/year in India – Times of India

NEW DELHI: In one of the most ambitious push to its Make in India programme, the Centre has proposed that American electronics giant Apple generate annual production output worth $50 billion in India over the next 5-6 years and expand its locally-made product kitty beyond iPhones to include Macbooks, iPads, air pods and watch.
Top government officials had a high-level meeting with senior functionaries from Apple, where they asked the Tim Cook-led company to develop India as a global sourcing base which would be used to export fully-built products across the world, on similar lines to what is being achieved out of China currently.
Apple’s manufacturing in India is miniscule at the moment when compared to its global needs, even as its top production partners, the Taiwanese trio of Foxconn, Wistron and Pegatron, have set up base in India. On the other hand, China accounts for the majority of production for the company and it is estimated that it sources as much as 95% of its goods from the Dragon Land.
Foxconn and Wistron are already manufacturing for Apple in India at a top rate, though the volumes are “near negligible” when compared to what they manufacture in China. The company only makes the iPhone in India currently (the latest iPhone13 is still not made here), a part of which is also exported, though other products from its portfolio are not made here and simply imported.
“The meeting with the Apple officials happened recently, where senior members of the government – including a top minister – were present. The government told the company that India is setting up an enabling environment to give a massive push to electronics manufacturing in the country, with a big eye on exports. The enabling environment includes production-linked incentive (PLI) schemes to encourage companies to invest in, and grow, manufacturing in India. Also, capital subsidy plans are being given out, such as the one allotted for kickstarting semiconductor manufacturing where the government has extended a support of $10 billion for those willing to invest,” a top source told TOI.
Questions sent to Apple on the matter remained unanswered.
Apple had revenues of $3 billion in India in fiscal 2020-21, registering a growth of 68%, though a large part of this turnover came from products which had been imported (largely China) and not made in the country. Sale of India-made products would be very low, thus prompting the government to nudge the company to look at deepening its India manufacturing commitment.
The manufacturing potential surely looks large for India. Apple’s global sales revenue in the company’s fiscal year, which ended September 25, 2021, stood at a whopping $365 billion, of which $191 billion came from iPhones, while around $67 billion came from Macbooks and iPads. Wearables such as air pods and watch turned in another $38 billion.
The government is understood to be working on a fresh production-linked incentive plan for notebook production in India to encourage Apple and its manufacturing partners show interest. Also in the works is a PLI plan for wearables and hearables, which may help in bringing in production of Apple’s air pods and watches.
The government’s seriousness on the issue can be understood from the fact that recently, Electronics and IT Minister Ashwini Vaishnaw met leaders of the Indian electronics business, and these included functionaries from Apple and its manufacturing partners. The Minister had assured the industry about the government’s ambitious plans to boost electronics manufacturing, and how it sees the segment grow from the current $75 billion to around $250 billion in the next 5-6 years. “In fact, the industry has been more bullish, and told me that the market may grow to as much as $300 billion with the right enabling environment,” Vaishnaw told TOI.
Apple’s manufacturing partners have currently applied for and won the PLI contracts extended for smartphone manufacturing, but not in any other category. It is expected that with a more comprehensive incentive policy for notebooks and a scheme for hearables and wearables, the company may look at making new products (beyond iPhones) inside India.

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