Apple is looking to ramp up its investment in India, shifting close to a fifth of its current production capacity from China to Indian manufacturers, according to a Monday report from the Economic Times.
“We expect Apple to produce up to $40 billion worth of smartphones, mostly for exports through its contract manufacturers Wistron and Foxconn,” a senior government official told the publication.
Expanding its ‘Made in India’ program
Apple started producing iPhones in India in 2017. It began with the iPhone SE, then expanded to the iPhone 6s, and beyond. Apple started selling these devices to the local market under the “Made in India” tagline. The Indian market is a relatively small one for Apple, however. That suggests that, if Apple shifts a fifth of its manufacturing to India, most of these handsets will be exported.
“India isn’t a big market for Apple as the company sells only a fraction of its total output in India. It is actually looking at India as a base to manufacture and export, essentially diversifying its production out of China,” the official said.
In the 2018/2019 calendar year, Apple reportedly produced $220 billion worth of goods in China. Apple exported $185 billion of these. It directly or indirectly employs around 4.8 million people in the country.
The ET report says that Indian Prime Minister Narendra Modi met top executives from Apple in late December. This “kick-started the process.”
By expanding its investments in India, Apple should be eligible for various local incentives. Apple is reported to be opening its first Apple Store in India some time in 2020.
Apple has been reportedly looking for ways to expand production beyond China for some time. The company has previously asked its suppliers to explore manufacturing opportunities outside China. As the coronavirus-induced shutdown in China at the start of 2020 demonstrated, currently Apple is highly reliant on China for producing its devices. Alongside India, Apple is also reportedly embracing manufacturing locations like Vietnam.