Apple’s strategy to produce iPhones in India is integral to reducing its reliance on Chinese manufacturing, and recent reports suggest potential cost reductions in this process.
As part of this effort, the Indian government is reportedly planning to invest at least $2.7 billion to support domestic manufacturing, which could lower production costs for iPhones in the country…
Apple’s Expansion of iPhone Production in India
Apple’s need to diminish its reliance on China for manufacturing has been evident for years, and the pandemic highlighted the dangers of having up to 80% of global iPhone production centralized in a single location.
Targeting India as a vital secondary manufacturing hub, Apple has set ambitious goals, with projections that as much as half of all iPhones could be produced in India by 2027, although actual advancements have been gradual.
Progress accelerated significantly last year. Bloomberg reported in April that approximately one in seven iPhones were assembled in India, although production of high-end models had typically lagged due to complex manufacturing requirements. This trend shifted with the launch of the iPhone 16, which saw production in India starting shortly after its release.
New Initiatives for Government Support
The Indian government has been promoting local smartphone manufacturing through tax incentives and reductions on import tariffs for essential components. Bloomberg indicates that these measures are set to be expanded.
India’s government is contemplating additional subsidies for manufacturers of electronic components and tariff reductions on imports to enhance local production, particularly for smartphones produced by firms like Apple Inc.
According to insiders, the Ministry of Electronics and IT has proposed offering at least 230 billion rupees ($2.7 billion) in support for manufacturers of components such as batteries and camera parts.
The ministry has also suggested reducing tariffs on select electronic components, a move that meets industry requests and will aid in lowering production costs, according to one source.
An announcement regarding this initiative is anticipated in the upcoming monthly budget.
Apple is believed to be planning for simultaneous production of the iPhone 17 in both China and India.
Photo by Jainam Sheth on Unsplash
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