Can Apple depend on India to bolster iPhone manufacturing?

The pandemic has forced iPhone maker Apple to put more focus on manufacturing its devices here in India. However, the country’s production lines have only just begun ramping up. Does India have the production capacity to become Apple’s go-to alternative? Mint explains:

Where does India lie in the global manufacturing supply chain?

As far as volume of mobile phone manufacturing is concerned, India is considered to be the second largest mobile phone manufacturing market in the world, behind China and ahead of Vietnam and Mexico, which are the primary markets for manufacturing. However, the difference between the top two, that is India and China, is huge at the moment. For instance, China produced 1.5 billion phones in 2020, according to estimates from data tracking platform, Statista. In the next five years, India, however, targets production capacity of $110 billion worth of phones, about 50% of which will be domestic.

What is India’s production capacity?

Estimates from industry stakeholders and analysts suggest that phone makers in India produce somewhere between 300 to 350 million mobile phones every year. This includes all phone makers, though Apple and Samsung are the big two in terms of value. In addition, over 100 million phones among these are feature phones, which are sold in India and exported overseas. The main difference between Apple and Samsung, and others, is that their phones sell at higher prices and are hence more valuable. While Samsung is the largest in value terms is Samsung, some expected Apple to become the largest manufacturer in terms of value by the end of 2022.

How much can Apple depend on India?

Industry experts have warned repeatedly that Apple’s plans to ramp up India is not something that will come to fruition in a year or two. At the moment, manufacturers have faced concerns because of Indo-China tensions and global supply chain constraints, which has led many manufacturers, including Apple’s, to run behind their original estimates. The Indian government even revised its flagship production linked incentive (PLI) scheme last year, since firms weren’t able to meet the targets. The good news, however, is that a significant number of firms have met the PLI targets this year and are in the process of claiming their incentives.

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