The three main Apple phone assemblers in India, Foxconn, Wistron and Pegatron seem happy with the Indian government’s PLI (Production-Linked Incentive (PLI) scheme that the companies have reportedly committed themselves to $900 million (Rs 6500 crore) over the next five years. India’s $6.65 billion PLI scheme offers companies cash incentives on any increase in sales of locally-made smartphones over the next five years, compared with 2019-20 levels. As the global heat is on China, the Indian government is hoping to cash in on it by rolling the red carpet to companies that hitherto had China as their focus. The Indian government is particularly targeting the contract manufacturers of Apple.
A major shift towards India:
A report in Economic Times said, “Foxconn has applied to invest about Rs 4,000 crore, while Wistron and Pegatron have committed to invest close to Rs 1,300 crore and Rs 1,200 crore, respectively, under the PLI plan.” According to media reports, the investments by Apple phone makers will be for increasing production capacities. Foxconn and Wistron already make smartphones for Apple in India, while Pegatron has recently set up a local entity. That plan is expected to create roughly 10,000 jobs, the source added. Apple started assembling in 2017 a low-cost iPhone model in India through Wistron’s local unit in the tech hub of Bengaluru. It later ramped up production, with Foxconn beginning to assemble iPhones last year and Wistron widening operations.
“India is key to Apple’s global ambitions as it expands beyond China,” said Tarun Pathak, an associate director at tech researcher Counterpoint. “It offers a strategic market to them where skilled labour is cheaper as compared to other manufacturing destinations, the size of the internal market is huge and the export potential is enormous.”
Local manufacturing helps Apple save costly duties levied on imports of fully-built phones and components in India, where the Cupertino, California-headquartered tech giant accounts for just 1% of smartphone shipments.Apple is looking to change that. It launched its online store in India last week, and is building its first company-run retail store in the financial hub of Mumbai.