Apple is making strides to diversify its iPhone manufacturing by increasing production in India, a move that may soon become less expensive. Recent reports suggest that the Indian government is considering a package of support that could reach up to $2.7 billion, aimed at enhancing local manufacturing capabilities.
Accelerating iPhone Manufacturing in India
For several years, Apple has recognized the necessity of reducing its reliance on China as a manufacturing hub. The COVID-19 pandemic highlighted the vulnerabilities of having approximately 80% of iPhone production centralized within a single facility.
India has emerged as a strategic alternative for Apple, with ongoing discussions suggesting that as much as half of all iPhone production could occur in India by 2027. However, progress in this area has been gradual.
Significant momentum was gained last year when it was noted that nearly one in seven iPhones were produced in India, according to a report from Bloomberg in April. Historically, the production of flagship models had lagged due to the complex manufacturing processes involved. This trend shifted with the introduction of the iPhone 16, which saw manufacturing commence shortly after the official release.
Government Support Initiatives
To foster smartphone manufacturing, the Indian government has implemented strategies such as tax incentives and reduced import tariffs for components. Recently, Bloomberg reported that these initiatives are set for expansion.
Indian authorities are deliberating new subsidies for manufacturers of electronic components, alongside potential tariff reductions aimed at bolstering local smartphone production, particularly from companies like Apple Inc.
The Ministry of Electronics and IT is proposing a financial aid of at least 230 billion rupees (approximately $2.7 billion) to support makers of components such as batteries and camera modules, according to confidential sources.
Additionally, the ministry’s recommendations include lowering tariffs on specific electronic components, addressing industry concerns to help decrease overall production costs.
An official announcement regarding these measures is anticipated in the upcoming budget presentation.
