Apple is ramping up production in India, with contract manufacturers expected to produce iPhones worth INR 47,000 Cr in FY22-23. It appears that the government’s production linked incentives (PIL) scheme, which was implemented two years ago, has aided it.
This is nearly five times the INR 10,000 Cr worth of iPhones made in the country by Foxconn, which has a plant in Tamil Nadu, and Wistron, which has a plant in Karnataka, in the previous fiscal year (Narasapura).
This is the second year of the PLI scheme, which was first implemented in the country in March 2020 and targets three industries: mobile manufacturing and electric components, pharmaceutical, and medical device manufacturing. The goal was to shift smartphone manufacturing units from China and Vietnam to India.
In the second round of the PLI scheme for mobile phone and electronic component manufacturing, incentives of 5% to 3% on incremental sales of goods manufactured in India and covered by the segment will be extended for a period of four years.
To qualify for incentives under the PLI for smartphones for the second consecutive year, Apple’s expected production of iPhones this fiscal year is more than double the requirements for the California-based company. According to the plan, each of the contract manufacturers – Foxconn, Wistron, and Pegatron – should produce iPhones worth INR 8,000 Cr.
Wistron and Pegatron (Tamil Nadu), which began production in April 2022, primarily manufacture the iPhone 12, while Foxconn produces the iPhones 11, and 12. The company began production of its latest phone, the iPhone 13, at its Chennai plant earlier this month in collaboration with Foxconn (Sriperumbudur).
The iPhone maker may ship 7 million units this fiscal year, giving it its highest-ever market share of 5.5 percent. However, India accounts for less than 1.5 percent of Apple’s global sales; more than 60 percent of iPhone production will be for exports, which is one of the PLI Scheme’s primary goals.
Meanwhile, according to CyberMedia Research, Apple shipped approximately 1 million ‘Made in India’ iPhones in the country in the first quarter of 2022, representing a 50 percent year-on-year (YoY) growth.
iPhone sales in India increased by 22% in the first quarter of 2022, led by the iPhone 12 and iPhone 13. According to the report, the iPhone 12 led the pack with 52 percent of shipments, followed by the iPhone 13 with 20 percent. It was closely followed by the iPhone 11, which accounted for 18% of total shipments in India.
Apple began producing iPhones in the country in 2017 with the low-cost iPhone SE. It later began producing the iPhone 12 and iPhone 13 in the country. ‘Made in India’ iPhones account for roughly 70% of the company’s smartphone sales in the country.
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However, the 70 percent coming from its manufacturing partners in India is a trickle in comparison to the waterfall of China-made products.
In January of this year, the government urged Apple to develop India as a global base for exporting fully-assembled products to the rest of the world, with a goal of generating $5 billion in annual production output over the next five to six years.
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