2022: The Year When iPhone Manufacturing In India Got A Major Push

Apple will expand its local manufacturing capacity in India to produce 25 per cent of all iPhones by 2025.

Apple started assembling iPhones in India back in 2017, but until 2022, the Cupertino, California-headquartered tech giant was assembling older generation iPhone models in India. Apple launched the iPhone 14 models in September and the company began assembling the new iPhone 14 in the country, 10 days after the global launch of the iPhone 14 series, thus, highlighting Apple’s decreasing dependability on China, or at least an attempt to do that.

Recently, analysts at JP Morgan said that Apple will expand its local manufacturing capacity in India to produce 25 per cent of all iPhones by 2025.

China's missteps of following zero Covid restrictions and the following workers’ unrest at Apple’s biggest contract manufacturer Foxconn’s manufacturing facility in Zhengzhou has played a big role in giving a push to India’s assembling of iPhone models. However, India’s Product Linked Incentive or PLI scheme also deserves credit for making the country an attractive place to assemble the iPhones.

“India is a very attractive market for smartphone players. India has almost the same population size as China’s, and a higher birth rate. Therefore, many local and international consumer electronics brands regard India as an important strategic market. Besides, with the continuous improvement and maturing of production technology combined with the government’s support policies, we have seen increasing smartphone production in the country,” Prachir Singh, Senior Research Analyst, Counterpoint Research, told ABP Live.

iPhone has three assembly partners in India: Foxconn, Wistron and Pegatron and all of them are participating in the PLI scheme and their production is expected to grow in the coming years. 
India contributed to 3-4 per cent of iPhone manufacturing globally in CY2021 and Counterpoint Research believes it to grow and reach 7-8 per cent by CY2023. 

Mumbai-headquartered Tata Group also began talks this year to buy Wistron’s India plant in the southern state of Karnataka for Rs 4,000-Rs 5,000 crore. This is being seen as a major boost to India’s local manufacturing capabilities, analysts say.

“Making an iPhone by an Indian company would be a major boost to the country’s effort to challenge China, which dominates the electronics manufacturing. Apple’s reliance on China will be reduce. In addition, it could persuade other global electronic brands to consider assembly in India, so they do not rely solely on China,” noted Manish Rawat, Analyst, TechInsights.

The growing India smartphone market, the second largest in the world only after China and domestic demand are also key reasons why Apple chose India as a “China plus one” manufacturing destination.

As China attempts to woo back disgruntled employees at Foxconn’s Zhengzhou plant, which is the biggest supplier of iPhones, India can also use this opportunity to start assembling of iPhone Pro models, which are being exclusively assembled at the Foxconn China plant.

“This is a good opportunity to try to get the manufacturing/assembing of Pro models and scale up the operations in India, establishing India as a China + 1 manufacturing and exports destination,” said Navkendar Singh, Associate Vice President, Devices Research, IDC India.
 
“India is attractive destination to assmeble iPhones only to the extent of lesser such disruptions as seen in China. Outside that it has to compete with China on infra availability, skilled labour and long term viability as a global exports hub, like China has been till now,” he added.