Apple's strategic pivot: A quarter of world's iPhones to be made in India - Times of India - IndiaTimes

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In a strategic move that marks a significant shift in its global manufacturing strategy, Apple Inc is set to increase its iPhone production in India, aiming to make the country a pivotal hub in its supply chain. This initiative, in collaboration with its main supplier Foxconn, signals a major realignment of Apple's production, historically centered around China.
Apple’s big bet on India

According to a Wall Street Journal report, Apple and its suppliers plan to build more than 50 million iPhones in India annually within the next two to three years, and more after that, making India a key production hub for the world’s most valuable company.
The move, led by Taiwan-based Foxconn, reflects Apple’s efforts to diversify its supply chain and reduce its dependence on China, amid trade tensions with the US and other challenges in the world’s second-largest economy.
India, which has a large and growing consumer market, also offers Apple a strategic advantage in terms of its trust factor and its diplomatic ties with the US and its allies.

Why it matters

Apple’s expansion in India could boost its global competitiveness and market share, as well as create jobs and opportunities for local suppliers and contractors.
Apple has gradually increased its presence in India in recent years, despite the difficulties of doing business in a country with poor infrastructure, restrictive labor rules, and high taxes and tariffs.
Apple has also chosen India as the site for a crucial manufacturing stage for lower-end iPhones to be sold in 2025, giving India a role that was previously limited to China.
In a notable development this year, iPhones manufactured in India were launched simultaneously with the global sales debut of the latest model, marking the first time there was no delay compared to the release of iPhones produced in China.
Apple’s suppliers, especially Foxconn, have invested billions of dollars in India to build new factories and upgrade existing ones, aiming to meet Apple’s high standards and tight deadlines.

By the numbers

A new Foxconn plant in Karnataka, expected to start operating in April, will make 20 million mobile handsets annually, mainly iPhones, within the next two to three years.
Another iPhone-producing megaplant, still in the planning stage, will have a similar capacity to the one in Karnataka.
An existing Foxconn plant near Chennai and another existing plant recently bought by Tata will also ramp up their production, adding to the total output.
As per a Bloomberg report, Tata is also planning to build a factory in Hosur, Tamil Nadu. People familiar with the matter, who chose to remain anonymous, have revealed that this facility is expected to feature around 20 assembly lines and employ approximately 50,000 workers within a two-year timeframe. The aim is to have this factory operational within 12 to 18 months.
The newly planned factory is anticipated to be of a medium scale in comparison to global iPhone manufacturing sites. It's expected to surpass the size of the facility that Tata took over from Wistron, currently employing over 10,000 individuals, yet it will be smaller than Foxconn's largest plants in China, where the workforce numbers in the hundreds of thousands.
The combined annual capacity of these plants will reach at least 50 million to 60 million iPhones within the next two to three years, and grow by tens of millions of units after that.

The big picture

Apple’s move to India is part of a broader trend among companies that are worried about overreliance on China and are looking for alternative locations, especially in Southeast Asia and South Asia.
The US and its allies have been trying to block Beijing’s access to advanced technology and strengthen their ties with New Delhi, which has also been involved in border disputes with China.
Apple has faced challenges in China this year, including the Chinese government instructing some officials not to use iPhones at work and a court ruling that banned some older iPhone models for infringing on Qualcomm’s patents.

What they are saying

Foxconn announced on November 27 that it was investing more than $1.5 billion in India, without mentioning the iPhone or specific locations.
“India’s trust factor is very high,” said Ashwini Vaishnaw, India’s information technology minister.
“India-made iPhones were introduced on the first day of global sales of the latest model, eliminating the lag with China,” said a person familiar with the matter.

What to watch

Apple’s expansion in India could face some hurdles, such as regulatory uncertainty and infrastructure bottlenecks.
Apple’s suppliers have been pushing for permission to work 12-hour shifts, which they find helpful during peak seasons, but labor unions have resisted this proposal and demanded higher wages and benefits.
Apple has also been lobbying the Indian government to lower the taxes and tariffs on its products, which make them more expensive than in other markets.

(With inputs from agencies)

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