The manufacture of Apple products in India tripled in about a year, new data has shown, indicating that the country has emerged as the new powerhouse in the technology supply chain. The iPhone maker assembled products worth more than $7 billion in India the last fiscal year, Bloomberg reported, citing data.
As of now Apple manufactures 7 percent of iPhones in India, which is a huge jump from around 1 percent in 2021. Apple's manufacturing partners Foxconn and Pegatron are also makig new investment in India, which will increase the India output of Apple products.
India's Emergence
India's emergence as a preferred manufacturing hub coincided with the western companies' loss of trust in China's political stability. Though India is a late entrant in the sector that has been dominated by China and Taiwan, the Indian government has been promoting the 'Make in India' campaign aimed at grabbing a significant share of the Asian hi-tech manufacturing jobs.
Factors like the worsening of the US-China relations, the extended coronavirus lockdowns that hit supply chains hard and the increasingly worsening trade wars with the West impacted the confidence of multinational companies like Apple in China's supply chain eco-system. "US-China trade tensions kicked off the production relocation cycle and the search for a 'China+1' manufacturing approach for the Apple supply chain from late 2018," a JPMorgan report said.
India Production Started in 2017
Apple started making iPhones in India in 2017 in a limited way, with the manufacture of iPhone SE. However, Prime Minister Narendra Modi's government announced huge incentives in the years that followed, which drove Apple's Taiwanese contract manufacturers explore the India option further.
Now, Apple's contract manufacturers Foxconn Technology Group, Wistron Corp. and Pegatron Corp make various models of iPhones in their India plants. That is a huge change from the days when Apple was making 98 percent of its products in China.
According to a projection by JP Morgan analysts, Apple could end up making one out of four iPhones in India by 2025. In its 'Apple Supply Chain relocation' report, JP Morgan predicted that Apple "is likely to move about 5 per cent of iPhone 14 production to India from late 2022 and reach 25 per cent by 2025".
Another Landmark
According to the Bloomberg story, Apple could give the go-ahead for the manufacture of iPhones in India and China concurrently by 2025. It was unthinkable years ago that the latest iPhones would be manufactured anywhere other than China.
The report also says that if Apple supplies like Foxconn and Pegatron go ahead with their aggressive expansion plans in India, the south-Asian country could produce 25 percent of Apple iPhones by 2025.
According to another estimate, India is likely to produce 45-50 per cent of Apple's iPhones by 2027. This will put India at par with China by that year. In stark comparison,almost 80-85 percent of iPhones were produced China even as late as 2022.
Apple CEO Tim Cook will be in India next week to inaugurate Apple's first brick-and-mortar stores in Mumbai and Delhi.
