Why iPhone 15 Costs A Lot Even Though It's Made in India?

It's only been a few days since Apple released its newest phone, the iPhone 15 series, in India. iPhone enthusiasts are extremely excited, and there are long lines outside Apple stores in Delhi and Mumbai as people eagerly wait to get their hands on the iPhone 15.

iPhone 15 Price In India

Why do iPhones still have a high price tag in India?

Despite increased local production, iPhones remain considerably more expensive in India compared to countries like the US, Dubai, and Singapore. This price difference arises from various factors.

Firstly, iPhones in India are not entirely manufactured locally but rather assembled there. Many components are imported, attracting customs duties and taxes, which directly impact the final price. The Goods and Services Tax (GST) at 18% further adds to the cost, resulting in a cumulative increase of 40%.

Beyond material costs, pricing involves complex factors. Apple collaborates with local companies to offer discounts and trade-in options, helping offset the impact of customs duties and taxes on imported models.

Older-generation iPhone models play a crucial role in Apple's sales strategy in India. Analysts believe that profits from higher-end models enable Apple to reduce prices on base and older iPhones, making them more affordable. This strategy helps iPhones remain competitive in the Indian market.

Not all iPhone models are produced domestically, preventing Apple from implementing dual pricing tiers. This contributes to pricing challenges.

Price stability of flagship smartphones isn't unique to Apple. Other brands, like Samsung, Oppo, Xiaomi, and Vivo, also manufacture phones in India, including flagship models, and their prices have remained largely unchanged.

The fluctuation in the Indian rupee's value against the US dollar in the past year has contributed to the iPhone 15's higher price in India.

Apple's limited collaborations with Indian banks for financing options and lower trade-in values for older iPhones also affect pricing.

Some critics argue that Apple has historically treated India as a secondary market, despite high prices. Indian customers do not have access to various Apple services.

Factors like supply chain dynamics and the scale of business in India, which is smaller compared to the US and Dubai, also influence iPhone pricing in the country.

What Are Apple's Plans For India?

Just today, there have been reports indicating that Apple intends to increase its production in India by more than five times over the next five years, as per a PTI report citing unnamed government officials.

In the previous fiscal year, Apple's production in the country exceeded $7 billion, and the company is now targeting a production goal of $40 billion.

Apple's presence in India has been on the upswing since 2016 when the company initiated local manufacturing of certain iPhone models. According to data from the India Cellular and Electronics Association (ICEA) and government sources, smartphone exports from India surpassed $11 billion in the fiscal year ending in March, surpassing the initial target of $9-10 billion. Remarkably, Apple accounted for nearly half of these exports.

As reported by ET, Apple is preparing to commence local manufacturing of the iPhone 15 Plus in the upcoming quarter, following the successful launch of iPhone 15 production in India. This development underscores the consistent growth of iPhone manufacturing in India over the past four years, with expectations of reaching approximately 6% in 2023.