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Government policy and the availability of cheap labour have helped India become the world’s second-largest mobile manufacturing hub, along with its existing status as the second-largest smartphone market. The rising focus on India mobile manufacturing has caught the attention of global companies such as Apple who have shifted a lot of production from China to India, and just this week the Cupertino-based firm opened its first retail stores in the country.
Apple CEO Tim Cook has been open about Apple’s strategy to expand in India even back in 2016. In the same year, he said, “We are putting enormous energy in here (India), and we are not here for a quarter, or two quarters, or the next quarter, or the next year, or the next year, we are here for a thousand years.”
India mobile manufacturing and Apple
Apple tripled the production of the iPhone in India reaching $7 bn in 2022, which made up 7% of the total iPhone production, while JPMorgan told Reuters that it expects Apple to move 25% of its iPhone production to India by 2025. Also, according to the estimates of a Frost and Sullivan report along with the Consumer Electronics and Appliances Manufacturers Association (CEAMA), the manufacturing industry in India is expected to grow at a compounded annual growth rate of 11.7% by 2025.
The Indian government has been very supportive of the investments made in the country to utilise its workforce. As part of the ‘Atmanirbhar Bharat’ (Self-reliant India) campaign, the government introduced Production Linked Incentive (PLI) for 13 sectors, including electronic systems. Under the scheme, an incentive of 4% to 6% on incremental sales of products manufactured in India is given to eligible companies for a period of five years from the base year.
The ‘Make in India’ initiative was introduced in 2014 to create and encourage companies to develop and assemble products in India by incentivising investments in manufacturing.
According to reports, due to the PLI scheme, about 150,000 jobs are expected to be created in India’s mobile manufacturing as companies look to expand their manpower to keep up with the large manufacturing ambitions. Major staffing companies in the country said that apart from the Taiwanese giants Foxconn, Pegatron and Wistron, which are the top contract manufacturers of Apple, there are Samsung, Nokia, Tata Group and Salcomp that are likely to add to their manpower.
Kartik Narayan, CEO of TeamLease, one of India’s biggest staffing companies, said, “Most mobile brands and their component manufacturing and assembly partners who already have or are looking to set up some form of manufacturing in India are ramping up hiring.”
Foxconn has a plan to invest around $700m in a manufacturing plant in India to produce phone components and possibly iPhones as well. Pegatron too is looking to increase its production in the country.
Meanwhile, Tata Group, one of the largest conglomerates in India, is in talks with Wistron to purchase its iPhone manufacturing facility in the southern state of Karnataka. The deal is expected to be closed by the end of April and it would provide India with its first local production line for Apple products. There are also speculations that once the deal is done, Tata may look to acquire Pegatron’s iPhone manufacturing facilities in the country.
– reporting by Jovan Thomas
