Apple All Set To Make Rs 47,000 Crore Of iPhones In India! Big Boost For Make In India Vision

Foxconn and Wistron- Apple’s contract manufacturers- are expected to make iPhones worth Rs 47,000 crore in India this fiscal.

Big Boost In Manufacturing

This is almost five times the Rs 10,000 crore worth of iPhones manufactured locally in FY22.

This would serve as a big boost to the production-linked incentive (PLI) scheme.

The production for FY23 is more than double the obligation for the manufacturers to qualify for sops for the second year under the PLI scheme.

The scheme requires each of the contract manufacturers to produce smartphones worth Rs 8,000 crore.

Record Shipments

Apple is anticipated to register record shipments of approximately 7 million units this year with its highest ever market share of 5. 5 percent.

The record numbers are boosted by strong demand for a wider portfolio of devices which is helped by higher local production and attractive financing schemes.

India accounts for less than 1. 5 percent of Apple’s global sales, and more than 60 per cent of the locally made iPhones are for exports.

How PLI Scheme Works

The PLI scheme for smartphones was launched in 2020 in an attempt to attract smartphone manufacturers from China and Vietnam to India.

They will be offered incentives for the ‘Assembly, Testing, Marking and Packaging (ATMP)’ of the phones in the form of 4-6% cashbacks over five years.

The scheme is an attempt to offset the disability in the range of 8.5% to 11 per cent that now exists between India and its manufacturing rivals.

Gaps The Scheme Looks To Fill

The disability occurs due to: 

• Lack of adequate infrastructure, domestic supply chain and logistics 
• High cost of finance
• Inadequate availability of quality power
• Limited design capabilities and focus on R&D by the industry
• Inadequacies in skill development

With this scheme, the government intends to remove these barriers.

Production In China Vs India

The scheme has a total cost of approximately Rs 40,995 crore which includes an incentive outlay of approximately Rs 40,951 crore and administrative expenses to the tune of Rs 44 crore.

Through vendors, Apple has the capacity to manufacture $85-90 billion of iPhones, at factory price, out of China.

The smartphone major is likely to produce phones worth over $6 billion at factory price in the second year of the PLI scheme in India.

How It Began

Apple began its manufacturing journey in India with the production of the iPhone SE in 2017.

Presently many models including iPhones 11, 12 and 13 are manufactured in the country.

Out of its three manufacturers, Pegatron and Foxconn have facilities in Tamil Nadu while Wistron has a manufacturing facility in Bengaluru.