• Apple has started his manufacturing its flagship iPhone 11 in Foxconn plant near Chennai.
  • Apple already makes two other handset models in the country — the iPhone XR at the Foxconn plant and the iPhone 7 at the Wistron factory.
  • Foxconn is also planning to invest up to $1 billion in India.
  • A company must manufacture at least $10 billion worth mobile phones in a phased manner between 2020 and 2025

Apple has started his manufacturing its flagship iPhone 11 in Foxconn plant near Chennai. It is first time manufactured a top-of-the-line model Iphone 11 in the country, marking a boost for the government’s Make in India initiative. Production will be stepped up in phases and Apple may consider exporting the India made iPhone 11, reducing its dependence on China.

The latest move marks the growing localisation of Apple’s manufacturing in the country, where it’s keen to take advantage of benefits under the government’s production linked incentive (PLI) scheme (PLI scheme is Product Linked Incentive Scheme for Large Scale Electronics Manufacturing proposes a financial incentives to boost domestic manufacturing and attract large investments in the electronics value chain  including mobile phones, electronics components and ATMP units.). The PLI scheme had been designed to address disadvantages global supply chains faced in India vis-à-vis say China and Vietnam.

The company hasn’t cut prices as it also sells iPhone 11 handsets made in China in India but there could be an option of price cut later on. Local production saves Apple 22% import duty. Of the three new models Apple launched in September, the iPhone 11 is the biggest seller in India. Supplies of the locally made device have already reached stores, said the people cited above. Apple makes two other handset models in the country — the iPhone XR at the Foxconn plant and the iPhone 7 at the Wistron factory.

Locally made handset has already been reached Indian Market. Meanwhile, Apple also has plans to expand manufacturing in the country. Its supplier Foxconn is also planning to invest up to $1 billion in India.

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. Currently, Apple sells phones worth some $1.5 billion in India, of which less than $0.5 billion is locally manufactured, and has market share of some 2-3%. In contrast, Apple is a top investor in China. In 2018-19, it produced merchandise valued at $220 billion in China, of which it exported goods worth $185 billion, according to industry experts. It directly and indirectly employs about 4.8 million people there. With such incentives, we expect mobile phone exports out of India to cross $100 billion by 2025, it could be earlier than that…,” the first official said. Mobile phone exports out of India were around $3 billion for 2019-20.

A company must manufacture at least $10 billion worth mobile phones in a phased manner between 2020 and 2025 to avail the benefits of the PLI scheme. The selected applicant is required to meet targets on a yearly basis.

The scheme, which has a corpus of Rs 40,995 crore, provides incentive of 4-6% on incremental sales (over base year) of goods manufactured in India and covered under target segments to eligible companies, for a period of five years subsequent to the base year as defined

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