Apple Is Making Phones And Components In India For Export, Said Ravi Shankar Prasad

Aadhya Khatri - Sep 17, 2019


Apple Is Making Phones And Components In India For Export, Said Ravi Shankar Prasad

According to Union Minister for electronics and information technology, Apple is manufacturing components and mobile phones in India for export

According to Union Minister for electronics and information technology, Ravi Shankar Prasad, Apple is manufacturing components and mobile phones in India for export.

This claim was made after Prasad’s talks with representatives from 34 consumer electronics and smartphone companies. Executives from Samsung, Apple, Oppo, and Xiaomi all attended the meeting, among others.

“Apple has started manufacturing phones in India, including components. I am making this announcement publicly that now they have come to India, they have started making phones for export. They have also started making components for export. This is just the tip of the iceberg. I want a robust presence of Apple in India," Prasad said.

Through Wistron, a contract manufacturer, Apple is assembling iPhone 6S, iPhone SE, and iPhone 7 at factories in Bengaluru. However, the California-based firm has revealed nothing on its plans to produce and export for India.

Apple-Bengaluru-iPhone
Through Wistron, a contract manufacturer, Apple is assembling iPhone 6S, iPhone SE, and iPhone 7 at factories in Bengaluru

So far, Apple’s share in this huge market is just 1.6%, the rest is held by Vivo, Xiaomi, and Oppo, all come from China.

This statement from Prasad came half a month after the Indian government loosens the norms on requirements for foreign companies. Previously, these firms must have 30% of their production locally-sourced, but now, export has been made part of that. Foreign retailers have also been allowed to sell online before they can have their physical stores in the country, as long as these brick-and-mortar outlets are set up two years after the company starts their online sales.

The laxer rules will allow Apple to open its iconic Apple Store in India, which is expected to be a place for consumers to explore more of the company’s services and products.

Apple-india-manufacture
The laxer rules will allow Apple to open its iconic Apple Store in India

These new rules come just in time for the iPhone maker as it is looking to shift part of its manufacturing out of the Chinese borders because of the trade war between the U.S and the East Asian country.

According to the Nikkei Asian Review, Apple has asked its suppliers to evaluate the cost of moving 15% to 30% of the production from China to some Southeast Asian countries, heralding a major reconstruction of its manufacture.

Apple-reconstruction-india
Apple has asked its suppliers to evaluate the cost of moving 15% to 30% of the production from China to some Southeast Asian countries, heralding a major reconstruction of its manufacture

The reasons behind the loosened rules are the Indian government’s desire to attract more companies to turn India into a major hub for consumer electronics and mobile phones. It is expected that a detailed policy with incentives would be out in the next two or three months.

Here is what Prasad said:

“The real moment has come for India to manufacture for the world."

What the government targets is a sevenfold jump of production for electronics goods, from $70 billion in the period from 2018 to 2019, reaching $400 billion in 2025. A task force will be set up to ensure that companies have the favorable conditions they need.

“India offers a huge market. It will offer you friendly policies, incentives. We are also open if you (companies) have a facility just for exports also," Prasad said.

Back in 2014, India had only two units manufacturing mobile phones and accessories. They produced about 60 million devices. Four year later, in 2018, these figures are 268 units and 290 million phones.

According to the secretary, ministry of electronics and information technology, Ajay Prakash Sawhney:

“We need to aim for greater import substitution and also open up exports from India. Mobile phones segment will be a major area for boosting exports."

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