Apple Moves to India to Speed Up, Despite Industry Says Its Impossible to Replace China

  • "India takes over the transfer of Apple's Chinese industrial chain."
  • “India provides a strategic market for Apple, where there is cheap labor, and the market is huge.”
  • India imposed extremely strict restrictions on foreign mobile phone companies opening retail stores.

Apple is speeding up “Made in India.” By 2021, consumers in India will be expected to get the iPhone 12 produced in the country. This will also be Apple’s seventh model produced in India. Prior to this, low-priced and old models including iPhone SE, iPhone SE2, and iPhone 6 have been put into mass production in India. In 2019, iPhone 11 became Apple’s first flagship produced in India.

iPhone SE2

Behind this, “India takes over the transfer of Apple’s Chinese industrial chain” has once again become the focus of attention. Since the beginning of this year, Apple partners, represented by Foxconn and Wistron, have expanded their investment in India.

In fact, this year’s situation has pushed Apple to accelerate its “diversified supply chain layout”. India’s tax policy on imported mobile phones and the government’s “incentive plan” for manufacturing have given the Indian mobile phone market a positive view of Apple.

In the past, India imposed extremely strict restrictions on foreign mobile phone companies opening retail stores. In 2012, India implemented a requirement of “at least 30% of direct sales products come from India” for foreign retailers. This has resulted in Apple having to rely on local distributors to sell equipment in India for many years.

This situation has improved in 2019. In August 2019, 30% of the strict regulations were canceled. According to Reuters, Cook met with Indian Prime Minister Modi in June 2017 and lobbied him to make changes to the rules. “Apple’s proposal may increase weight.” The people of the market organization commented at the time.

Earlier this year, the Indian government introduced a more attractive $6.6 billion manufacturing incentive plan. The number of specific high-end smartphones produced by smartphone manufacturers in India will be subsidized from 4% to 6% of the cost for each part exceeding the previous year. The policy is valid for 5 years. The plan is intended to turn India into another “manufacturing factory in the world”, and some organizations expect it to create about 10,000 jobs in India.

As an incentive plan, the three major manufacturers plan to substantially increase iPhone production in India. According to media reports, Apple’s three top manufacturers plan to invest a total of nearly $900 million in India in the next five years. Among them, Foxconn has applied for an investment of about $542 million, and the other two Wistron and Pegatron also have different levels of additional investment.

Apple iPhone 12 and iPhone 12 Mini

In this regard, some researchers said that India is the key to Apple’s global expansion. “India provides a strategic market for Apple, where there is cheap labor, and the market is huge.” Correspondingly, local production in India will also save Apple from high tariffs. Prior to this, in order to promote the localization of manufacturing, India has raised import tariffs on mobile phones and components several times.

“Through the tariff policy to force you to build a factory in India.” A mobile phone chain person once told AI Finance and Economics. Apple’s assembly of the iPhone in India will help it avoid a 20% import tariff.

Comprehensive factors have accelerated Apple’s India layout. In September of this year, Apple launched an official online store in India and promoted the construction of offline stores. It will open India’s first Apple store in Mumbai.

Promoted by Apple, Foxconn began producing the iPhone XR at its factory in the suburbs of Chennai, southern India at the end of 2019. By July of this year, there was news that Foxconn would increase its investment in India by $1 billion to expand its iPhone production in India.

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Joyce Davis

My history goes back to 2002 and I  worked as a reporter, interviewer, news editor, copy editor, managing editor, newsletter founder, almanac profiler, and news radio broadcaster.

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