Apple to expand iPhone manufacturing in India to 25%: Piyush Goyal

Apple is planning to expand iPhone production in India from the current 5-7% to 25% of its overall production, said Piyush Goyal, Union minister of commerce and industry, according to a Reuters report, published on Monday. Goyal was speaking at an industry conference.  

“They are already at 5-7% of their manufacturing in India. If I am not mistaken, they are targeting to go up to 25% of their manufacturing,” Goyal said. 

Apple is yet to comment or confirm the minister’s claims. However, media reports show that the Cupertino-based company, with a market cap of $2.18 trillion, is looking to diversify iPhone manufacturing to cut dependence on China, where production has faced frequent disruption due to recurring outbreaks of Covid-19 and stringent lockdown rules by the government.  

On 6 November, Apple announced that the supply of iPhones 14 Pro and iPhone Pro Max models will remain low due to fresh Covid related curbs in China’s Zhengzhou, which houses the world’s largest iPhone manufacturing facility in the world run by Foxconn.  

At the same time, the production and export of iPhones from India have been growing. The manufacturing of the latest iPhone 14 series was also started in India by Foxconn in the same month it was unveiled globally. The new iPhones were launched on September 7. Production of its predecessor iPhone 13 was started six months after the global launch. Pegatron also started manufacturing iPhones in India in November.  

Last July, CEO Tim Cook said in a quarterly earnings call that Apple doubled its revenue in India in the third fiscal quarter ending June on the back of robust demand for iPhones. This shows that India is also emerging as a major market and not just a new manufacturing destination. 

Sanyam Chaurasia, analyst at market research firm Canalys, told Mint last week that Apple shipped 1.9 million iPhones in the December quarter and is the sixth leading smartphone vendor in India. Also, an ET report, published on Monday, claims that Apple became the first brand in India to export smartphones worth $1 billion in a month, last December. 

India is positioning itself as an alternative manufacturing destination to China by offering incentives to electronics brands and contract manufacturers for setting up and expanding local manufacturing. After smartphones, IT hardware, and semiconductors, India is also mulling a production-linked incentive (PLI) scheme for wearables. 

India’s electronics exports surpassed $16 billion in FY 2021-22, according to a report by industry body ICEA and ICRIER, released last August.