According to a recent report from MoneyControl, Apple has partnered with 40+ Indian companies to supply components for their products being manufactured in India. To name a few, the list includes companies like Dixon Technologies, Amber Electronics, HCLTech, Wipro, and Motherson Group. These companies will be providing various components for Apple’s products, like iPhones, MacBooks, iPads, and AirPods, locally.
Clearly, Apple is betting more and more on manufacturing its products in India. Is it just something related to US-China tensions or India’s PLI scheme? Bet, it is much more than that. Just stay tuned.
Apple loves India ❤️.
Apple had started manufacturing in India in 2017, starting with the iPhone SE. By 2021, nearly 80% of iPhones sold in India were locally assembled, including newer models like the iPhone 11, 12, and SE (2nd generation).
After 2021, the numbers started becoming interesting. In 2022, Apple manufactured nearly 15 million iPhones in India. By 2023, the numbers grew to 25 million, which accounted for 12% of all phones produced. And within the first 6 months of 2024, Apple India has already manufactured 18 million iPhones.
Currently, AirPods and iPads are being manufactured in India apart from iPhones. AirPod wireless charging cases are currently being produced in Pune through Jabil, while Foxconn is set to begin AirPods production in Telangana next year.
But why does Apple showering love on India?
Well, there are various reasons why Apple is betting more and more on manufacturing its products in India. Let us talk one by one.
1) The Donald J. Trump Reason:
While Trump was campaigning for the US presidential election in 2024, one of the major things that he was very vocal about was increasing tariffs on products imported from China from the current 12% to 60%. I mean it’s whooping 5 times. Assuming Trump does not increase the tariffs to this extent, it will still be somewhere around 40%, which is still huge. While at the same time, Trump has hinted that U.S. allies, such as India, might be exempted from these tariffs.
2) Rising Dependency Ratio in China:
According to C. Texor, the age dependency ratio denotes the relationship between economically dependent age groups (people who are either too old or too young to work) to those of working age. Those who are defined as being able to work, according to the source, are people between the ages of 15 and 64. The dependency ratio indicates how great a burden is placed on those of working age by those of non-working age.
According to the Seventh National Chinese Population Census, the age dependency ratio in China is rising severely. It has increased from 35.3% in 2013 to 46.5% in 2023. This meant that for every 100 people of working age, more than 46 seniors and children had to be supported.
Source :Statista
While at the same time, India is enjoying a median age of 28.4 years, which means that there are very few dependables, and more of the population is workable.
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If these data are interpreted in terms of labour costs, wages, and salaries, India seems a much better place for manufacturing at lower costs.
This interpretation can be supported by the labour cost data from the EY times. According to them, India’s wage is almost 3 times less than that of China’s.
3) India’s Production-Linked Incentive (PLI) Scheme:
India, to boost its Make in India Mission, had launched the Production-Linked Incentive (PLI) in 2020.
Under this scheme, manufacturers were given revenue-based annual payouts for up to five years, besides other benefits, to shift their manufacturing centres to India. Initially, it was launched to boost domestic manufacturing in key sectors, including electronics, automobiles, and pharmaceuticals.
Under this scheme of PLI, the electronics manufacturing sector was allocated $6 billion.
Apple benefitted heavily from this scheme. Under this scheme only, in 2023, Foxconn, the major manufacturer for Apple products, invested $1.5 billion in Tamil Nadu, built a $600 million plant in Karnataka, and another $500 million plant in Telangana.
4) Market Potential in India:
India offers significant market potential for Apple, driven by its growing population of over 1.4 billion people and a rapidly expanding middle class. With a young median age of 28.4 years, India’s tech-savvy youth is increasingly embracing premium products, pushing the smartphone market to $48.5 billion by 2026.
Also, the country’s economic growth, projected to become the third-largest economy by 2030, coupled with improvements in infrastructure and government policies, further strengthens India’s position as an attractive hub for global tech investments.
5) India’s Talent Pool:
India currently has one of the highest numbers of graduates across the globe. And the Government of India (GOI) is not leaving any stone unturned to make these youths skilled.
Various schemes, like the Prime Minister Internship Scheme, which offers 12 months of real-life experience in India’s top companies along with a monthly assistance of ₹4500 by the Government of India and ₹500 by the industry, show the seriousness.
Very soon, India will have much of its youth skilled and industry-ready, thus assisting companies like Apple to directly employ these industry-ready professionals.
Monthly assistance of ₹4500 by the Government of India and ₹500 by the industry.
Conclusion
It will be foolish to say that there is only one reason behind Apple betting on India. But for defenitely India is giving Apple numerous reasons not to go away .
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