PLI scheme may push Apple to up iPhone production in India to over 18% by FY25

[NG Missile Vessels]

The government’s production-linked incentive scheme for mobile phones may drive Apple to shift at least 18% of its global iPhone production to India by FY2025, with the potential for the Cupertino-based company to expand further if the larger scale incentivises its vendors to also expand in the country, a report said.

The report by Bank of America released Tuesday added that the PLI scheme for mobile phones can help India meet its ambitious target to triple its domestic production to $126 billion and achieve five times growth in exports to $55 billion, by FY2026.

Mobile phones are 21.5% of India’s electronics domestic demand and are growing at 15% compounded annually, the report said, calling the mobile phone PLI scheme a success story. “Since FY17, mobile phone production/exports are up 3.9x/65x, while imports are down to a third”.

However, the low production value add at 18% remains a key criticism of the scheme, where China and Vietnam have 38% and 24% local value add respectively.

The BoFA analysis suggested that 70% of the mobile phone’s cost that includes the display, memory and other semiconductor, are hard to localise in the near term since it requires large capex and high-end technology.

But the report noted that the Rs 38,000-crore PLI scheme had helped improve the export mix in local production from 16% on-year to 25%, adding that this can enable India to become a “credible global supply chain alternative” for mobile phones and electronics.

The BoFA report said India consumed $158 billion worth of electronic goods in FY2023, which grew at 11% compounded annually over FY17-23. Yet, the majority of supplies were largely met by imports. Electronics imports stood at $77 billion in FY23, and is the second-largest import bill representing a fifth of the country’s trade deficit.

However, the PLI scheme, the report said, will help in India’s efforts to cut imports and step up exports which can improve its macroeconomic outlook, and reduce the current account deficit by $112 billion over five years, provide stability in foreign exchange, and accelerate growth for capex, credit, and logistics sector.

The report said that 68 stocks globally are exposed on the back of the PLI scheme in India.

PLI scheme may push Apple to up iPhone production in India to over 18% by FY25

Apple may move up to 18% of global iPhone production to India by FY2025 under the governments production-linked incentive scheme, according to a Bank of America report. The move toward local production could make India a “credible global supply chain alternative” for mobile phones and...

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[Kuru]

India consumed $158 billion worth of electronic goods in FY2023, which grew at 11% compounded annually over FY17-23. Yet, the majority of supplies were largely met by imports. Electronics imports stood at $77 billion in FY23

I thought we were important 80% of electronic goods. So it’s 50% after all.

 

[NG Missile Vessels]

iPhone in India: Foxconn to manufacture smartphones in Karnataka by April 2024

Apple's biggest supplier Foxconn will start manufacturing iPhones in the southern Indian state of Karnataka by April next year, the state government has said.

The project will create around 50,000 jobs, it said.

Taiwan-based Foxconn manufactures the majority of Apple's phones.

The firm has been making older versions of iPhones at a facility in the neighbouring state of Tamil Nadu since 2017.

Last month, the company announced it had bought 1.2m sqm (13m sqft) of land near Bengaluru city in Karnataka.

Bloomberg reported Foxconn planned to invest $700m (£566m) on a new factory in the state. On Thursday, the Karnataka government said the project was valued at $1.59bn.

Land for the factory would be handed over to company by 1 July, it said in its statement.

According to Reuters, Foxconn has set a target of manufacturing 20 million iPhones a year at the plant in Karnataka.

Apple's decision to manufacture their flagship model in India and diversify its supply chains away from China comes as trade tensions rise between Washington and Beijing.

Apple makes most of its phones in China. In India, iPhones are assembled by several Apple suppliers, including Foxconn. It currently accounts for 10% of total iPhone production.

Apple CEO Tim Cook was in India in April to launch the country's first two Apple stores.

iPhone in India: Foxconn to manufacture smartphones in Karnataka by April 2024

Apple's decision to manufacture iPhones in India aims at diversifying away from China

www.google.com

 

[NG Missile Vessels]

India exported smartphones worth $1.5 billion in May; 80% were iPhones

Out of the total smartphone exports of $1.5 billion in May, Indian outward shipments of iPhones stood at $1.3 billion, a report by The Economic Times (ET) stated, citing data from the India Cellular and Electronics Association (ICEA).

In 2022-23 (FY23), India exported iPhones worth $5.5 billion. It was the first brand to achieve this milestone in India. But in the first two months of FY24 alone, the iPhone exports from India stand at over Rs 20,000 crore ($2.4 billion). In the same period last year, India exported Apple iphones worth Rs 9,066 crore.

According to the report, Apple accounts for 80 per cent of all smartphone exports from India. The rest 20 per cent is shared by Samsung and some other brands.

May's figures align with Apple's strategy of diversifying its supply chain and shifting away from China. The Cupertino-based tech giant is also looking to make AirPods in India.

According to a report by Bank of America, released last week, on the back of the Centre's production-linked incentive (PLI) scheme, Apple may shift 18 per cent of its global production of iPhones in India by FY25. In FY23, this share stood at 7 per cent.

The report's findings showed that within two years of the Rs 38,000 crore PLI scheme for mobile phones, passed in 2020, iPhone exports from India have risen to over $5.5 billion in FY23. It was $1.5 billion in FY22. This is expected to accelerate further as it has already reached a run-rate of $1 bn of monthly exports since February this year.

The ET report also said this might convince other US companies, including Tesla, to shift their supply chains to India.

In his visit to the United States of America (USA) between June 21 and 24, Prime Minister Narendra Modi and the Indian delegation are expected to highlight Apple's success story. They will also ask more global companies to set up their bases here.

They will also focus on companies in sectors like semiconductors, electric vehicles and critical emerging technologies to manufacture here.

https://www.business-standard.com/technology/tech-news/india-exported-smartphones-worth-rs-12-000-cr-in-may-80-were-iphones-123061900128_1.html

 

[Skull and Bones]

Google is also looking for sites and schemes to open up manufacturing in India.