Iphone Factory ChinaSource: Apple

What you need to know

  • A report says Apple may be planning to move more of its manufacturing to India.
  • Apple is expected to produce $40 billion worth of smartphones in the country over the next five years.
  • It would make Apple the country's largest exporter.

A report from India suggests that Apple has been in talks with Indian officials over several months as it looks to shift up to one-fifth of its production to India.

As reported by Economic Times:

Several meetings between Apple's senior executives and top-ranking government officials over the last few months have paved the way for the iPhone maker examining the possibility of shifting nearly a fifth of its production capacity from China to India and scaling up its local manufacturing revenues, through its contract manufacturers, to around $40 billion over the next five years, say officials familiar with the matter.

The report notes that the move would make Apple India's largest exporter. One senior government official stated:

"We expect Apple to produce up to $40 billion worth of smartphones, mostly for exports through its contract manufacturers Wistron and Foxconn, availing the benefits under the production-linked incentive (PLI) scheme"

The move would be solely aimed at increasing output for export to other countries, "essentially diversifying its production out of China". India recently introduced a new PLI scheme to try and coax manufacturers onto Indian soil. It offers a "production-linked incentive" to help boost India's manufacturing and to attract investment. The scheme reportedly provides incentives of 4-6% on incremental sales for up to five years. To comply, a company must make "at least $10 billion worth" of mobile phones during the period.

The report notes that the government expects mobile phone exports from India to cross $100 billion by 2025", a market Apple seems keen to take a slice of.