Moving ahead with the vision of the Make in India programme, the Modi government has urged tech giant Apple Inc to generate annual production output worth around $50 billion in India over the next 5-6 years. The move comes after a high-level meeting top government officials held with senior representatives from Apple. The govt of India has urged the company to start manufacturing other products like MacBooks, iPads, Air Pods, Apple Watch etc in India so that production can reach $50 billion in the next 5-6 years. Currently, the company only makes older generation iPhones in India.
Government sources informed that senior officials of the union government and a top minister were present at the meeting with Apple executives. The govt told the company that India is setting up an enabling environment to give a massive push to electronics manufacturing in the country, with a big eye on exports. Several initiatives, including the production-linked incentive (PLI) schemes, have been taken by the govt to encourage companies to invest in India and expand their operations in the country. Also, capital subsidy schemes also have been announced for several sectors including semiconductor manufacturing. The govt officials asked Apple to utilise these benefits to grow their presence in the country.
Government officials are reported to have asked the company to expand operations in India and utilise the Indian potential to develop a global production base to manufacture and export finished gadgets to all parts of the world. Currently, Apple manufactures only iPhones in India through its production partners and a major chunk of its products are manufactured in China and exported to the rest of the world for consumption.
Taiwanese manufacturers that make Apple products, Foxconn, Wistron and Pegatron, have set up bases in India, and Foxconn and Wistron are already making iPhones, but volume-wise it is very little on a global scale. Moreover, only earlier models of the iPhone were being manufactured in India. Production of the iPhone 13 was set to start at the Foxconn plant at Sriperumbudur in Tamil Nadu, but now that plant has been put on suspension after worker protests over various issues.
The government is putting massive efforts into creating a conducive environment to give a push to the electronics industry to manufacture in India and export for consumption. After the government announced the Production Linked Incentive (PLI) Scheme last year after the first wave of the Covid19 pandemic, there has been some major shifts in the tech-manufacturing sector.
For example, the market share of the Made in India units of iPhones increased from 17% in 2018 to above 75% in 2021 and its share of the exported smartphones from the country is now at 5% which was zero in 2017-18. All the suppliers of iPhone – Foxconn, Pegatron and Wistron – have been approved under the Centre’s PLI scheme, under which foreign companies are needed to invest Rs 250 crore and produce an incremental output of Rs 4,000 crore in the first year to get a 6% direct incentive as cashback.
The government is actively exploring all possibilities to ensure rising up in the global technology supply chain. According to certain reports, the electronics manufacturing industry is expected to see 30% growth in the next fiscal to be worth Rs 7 lakh crores. The current valuation of the industry is around Rs 5.3 lakh crores.
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