Apple is increasingly looking to the Indian market for driving growth in the coming years, including setting up its retail stores and manufacturing the phones locally in the country. Apple products are highly sought-after in India, and it will be a major win for the government if it could get iPhones to be locally manufactured under Prime Minister Narendra Modi's "Make in India" initiative.
To that effect, Tim Cook met with Modi when he visited India earlier this year. While he didn't commit to making phones locally, Apple has asked the Indian government for certain concessions, including financial incentives to get local production started.
One thing in Apple's favor is that Foxconn — its primary manufacturer — is investing heavily in India. The government is providing capital subsidies as well as tax-free imports of certain components used to build phones as a way to incentivize brands to set up factories in the country.
According to The Wall Street Journal, officials from the Ministries of Trade, Finance, Electronics and Information Technology, Forests and Environment are set to meet to discuss Apple's requests:
The government will have to see if it can tweak its rules for one company, though we want it to produce in India.
Apple is also asking the government to ease up on labeling laws for its devices. Local law mandates%20regulation,%202011.pdf) that all products contain detailed information on the packaging, including the maximum retail price, address of the parent company and its Indian subsidiary, contents of the box, and product details.
The result is that the back of an iPhone retail box looks like this in India:
The Department of Industrial Policy and Promotion is said to be considering the request. Apple has been looking to set up its retail stores in the country for some time now, but the government is yet to grant a single-brand retail license to the company.
Once it receives the license, Apple will be able to sell products directly from its retail stores and online instead of having to rely on distributors. The move also gives Apple more control over the pricing of the devices, which will be a huge deal for the company. A 32GB iPhone 7 currently costs the equivalent of $850, $200 more than its U.S. retail price. Considering there are no carrier subsidies in the country, buying an iPhone turns out to be a costly proposition. By manufacturing locally, Apple will be looking to bring at least some of the costs down.
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