Apple leads ECMS drive, ties up with five anchor vendors for India ops

In a major push to build a robust electronic components ecosystem in India, Apple Inc has signed up with five leading companies — global majors and top Indian conglomerates — as anchor vendors. Together, these firms are investing about ₹30,537 crore to supply components both to the Cupertino-headquartered company and to its global supply chain.

 

The five companies account for 73 per cent of the total investment of ₹41,863 crore cleared on Friday by the Ministry of Electronics and Information Technology (Meity) for 22 firms under the third tranche of the Electronics Components Manufacturing Scheme (ECMS), which offers incentives to eligible manufacturers.

 

These anchor vendors are expected to generate direct employment for over 27,614 people and create multiple times more indirect jobs. However, even though they are currently key suppliers to Apple, the scale of their investments will allow them to serve other global and domestic clients as well.

 

Apple is expected to tie up with more potential players and has been scouting around for suppliers of machinery to assemble smartphones in India. These are expected to be announced when Meity announces the next tranche of successful players under the scheme.

 

The five firms that received clearance include three leading Indian players — Tata Electronics, Motherson Electronic Components, and aluminium major Hindalco. The global players are Yuzhan Technology (part of the Foxconn group), which has made the largest investment so far, and ATL Battery Technology India Ltd, part of Japan’s TDK group.

 

Apple has stepped up efforts to build a large supply chain for iPhone enclosures in India, not only to meet domestic and export requirements but also to position the country as a global hub for this component, including supplies to China. At present, only a small share of its requirement to make iPhones in the country for domestic and export markets are supplied by Tata Electronics.

 

Apart from the Tata group, Foxconn and Motherson are together investing around ₹27,166 crore to set up plants across the country.

 

To ensure value addition in enclosure manufacturing, Apple has onboarded Hindalco to set up an aluminium extrusion plant — a key input for enclosures — with an investment of about ₹449 crore. Apple is also bringing in ATL Battery to invest around ₹2,922 crore to establish a lithium-ion cell manufacturing plant for smartphones in Noida.

 

The investments cleared under the scheme are expected to attract global-scale electronics component manufacturers, who will now supply not only to India but also to international markets — an element that was largely missing earlier. This, in turn, should help in a big way increase the value addition in smartphone manufacturing, which is currently estimated at 15-20 per cent, with an ambition to go up to 35 per cent.