Apple gears up to make iPhones in India: All you need to know

Apple looks to replicate its China success in India

India is expected to overtake the US as the world’s second-largest smartphone market this year, according to analysts. Apple, for months now, has been eager to grab a larger share of the pie by setting up its own (wholly owned) stores. As of now the company sells its products through distributors such as Redington and Ingram Micro.

The tech giant sees India as the next China for its phones and it looks to replicate its China success here. Although, Apple’s unaffordable price tags remain a huge deterrent for India’s price-sensitive consumers.

Here is what Apple has in store for India:

Last month, Apple announced plans to make iPhones for the Indian market in Bengaluru in association with Wistron, a Taiwanese OEM manufacturer for Apple and will start production by April 2017.

According to reports published in The Business Standard, Foxconn, the biggest contract manufacturer for Apple has also been roped in to set up a manufacturing unit in India. As per sources, Foxconn is adopting a model of setting up smartphone assembly lines in multiple cities across India, with a second iPhone facility coming up in Gurgaon. An announcement is likely to be made during the Vibrant Gujarat Global Summit 2017 to be held on January 10 at Gandhinagar. 

Apple announced that it would open its brand-owned stores, besides a 4,000-people facility in Hyderabad for its mapping unit.

What Apple wants from the government

* According to a report published in The Economic Times, the iPhone maker has requested for concessions like relaxation in labelling rules, so it doesn’t have to print product info on its devices, and tax incentives in return for setting up a manufacturing unit in the country. The Department of Industrial Policy and Promotion (DIPP) forwarded Apple’s request to the Department of Revenue and Ministry of Electronics and Information Technology (MeitY) in November. Government officials are yet deliberating on the company's request. 

“They have just sent it (the request). We will examine it,” said the official, requesting anonymity. “There are two things: First, there are almost 40 mobile manufacturing units (in India). We don’t want to disturb them. Second, we will have to see how much volume they will put out, how many jobs they will create, " an official said.

* The tech giant proposed to bring used smartphones and assemble them locally. The government has rejected this. Nevertheless, it got  local sourcing norms relaxed from the Department of Industrial Policy & Promotion to open its stores in the country. 

* The company has sought tax incentives that are being examined by the Finance Ministry, reports ET.

A ray of hope for Apple in India

In a report published in ET, government sources have said that it may agree  to some of Apple’s demands for setting up a manufacturing unit in India if the maker of iPhones promises a huge investment and commits to generating lakhs of jobs.

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Why India?

The company's major launches like Apple Watch, iPhone 6, iPhone 6s, etc, failed to set fire in the global tech market. Apple's iPhone sales have also witnessed a decline. According to Forbes, "Apple is cutting production of the iPhone by around ten percent in the first quarter of 2017" due to disappointing iPhone performances.

Hence, it is looking to realign its focus by turning its attention to its only alternative - India.