As the parley between Apple and central government is almost settled with no concession grants, the smartphone company has stepped forward for manufacturing iPhones in India by soon starting “trial assembly” of iPhones within the political borders of the country.
The manufacturing will take place in Bengaluru suburb – Peenya, by a Taiwanese original design manufacturer – Wistron, with whom Apple has a contract. The state is keeping a proactive approach to help pursue Apple’s case with the Centre government.
As cited on ET, a Karnataka state official said “We are working to see that (Apple) brings its entire component making ecosystem to Bengaluru and begins to export from here,” one of the officials said. “We are not much concerned about Apple making iPhones for the domestic market, which will happen anyway.”
The luxury phone maker is still in talks with the central government to get some additional benefits to the usual policies that government has set for companies making investments within the region. The benefits include the waiver of countervailing duty (CVD) on the import of components that go into making of iPhones.
“The application (of Apple) has not made much headway after passing through key ministries such as commerce, technology and finance,” according to a Karnataka government official, as cited on ET. The stated person is of the view that the Centre might be concerned of a waiver thatd will not fit into the framework of the proposed goods and services tax that is expected to start off from July 1.
As per speculations, the company will also establish brand new facilities for component manufacturing at a second location later.
RV Deshpande, Karnataka’s industries minister has said that he had word with Union ministers Arun Jaitley and Nirmala Seetharaman about Apple’s beneficiary policy shift demand.
Regarding the matter, Karnataka’s information technology minister Priyank Kharge said that Centre must encourage high-end tech manufacturing if it has to promote “Make in India”. He also emphasized that other companies should also start off from somewhere, even though the Indian ecosystem lacks opportunities to provide high-precision components.
Manufacturing gains
The Cupertino based giant is already working on three new iPhones this year that will include some new significant features, as per reports. Some of the complex features include a full-screen design, wireless charging and next-generation augmented reality capabilities. Now to fit those features in a smartphone is a challenge, and in order to get that done, Apple will accelerate production towards the end of the quarter.
The other challenge is that the demand of iPhone will exceed 50 million sets per quarter during the second half of the year, as per Digitimes. Now if this is true, then Apple may produce more than 100 million new iPhones – iPhone 8, iPhone 7s, and iPhone 7s Plus.
At a time of raise in demand, it is clear Apple made a significant decision by expanding its manufacturing operations. Also, considering the whole ‘Make in India’ campaign, India has successfully lured many companies to invest in the region.
Some important aspects, whether the iPhone will get a price cut (in India) is hard to guess for now, as the iPhone will be around $1000 in U.S., but when translated with Indian taxes it will cost roughly around INR 70-75,000. Besides the increase in employment rate, we can hope that iPhone may get cheap due to domestic manufacturing. If you feel that Apple should revise its price for its South Asian market, then please comment below, we are hearing and would like to have your feedback on this.
