The production of iPhones in India has become a crucial aspect of Apple’s strategy to lessen its reliance on China for manufacturing. A recent report suggests that the company might be on the verge of reducing operational costs associated with this endeavor.
The Indian government is allegedly preparing to provide at least $2.7 billion in support to promote local manufacturing, which could lead to decreased production expenses for iPhones in the region.
Apple Expands iPhone Production in India
The need for Apple to decrease its dependence on China as a manufacturing hub has been evident for several years. The pandemic underscored the risks of having approximately 80% of global iPhone production concentrated in a single facility.
India has consistently been a primary target for Apple as a secondary manufacturing site. There have been ambitious projections suggesting that by 2027, half of all iPhones could be produced in India, although actual advancements have been gradual.
Last year marked a significant acceleration in this initiative. According to Bloomberg, around one in seven iPhones were manufactured in India, although the production of high-end models had lagged behind due to the complex manufacturing processes required. This situation changed with the introduction of the iPhone 16, as production in India commenced shortly after the launch.
Increased Government Support
The Indian government has incentivized local smartphone manufacturing through tax subsidies and reduced import tariffs on components. As reported by Bloomberg, both of these initiatives are set to be enhanced.
The Indian government is looking into providing new subsidies for electronic component manufacturers and lowering tariffs on imports to stimulate local manufacturing, particularly for smartphones produced by companies like Apple Inc.
The Ministry of Electronics and IT intends to allocate at least 230 billion rupees ($2.7 billion) in support to manufacturers of components such as batteries and camera modules, according to sources familiar with the discussions, who requested anonymity.
The ministry has also proposed reducing tariffs on certain electronic components, which will help lower production costs, as noted by one of the sources.
An announcement regarding these initiatives is anticipated during next month’s budget session.
Apple is believed to be planning to initiate the production of the iPhone 17 simultaneously in both China and India.
Photo by Jainam Sheth on Unsplash
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