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Apple plans to open manufacturing units in India

US based Apple Inc, which manufactures popular electronic devices like Apple Watch, iPhone, iPad and Mac is planning to open phone manufacturing units in India. India is poised to become the 2nd biggest smart phone market in the World after China. India would topple US from its second place. However, India is said to be an attractive market as compared to China as the rate of market expansion is very slow in China as compared to India.

Apple currently has just about 5-6% of the fast growing Indian smart phone market and it aims to eat into the market shares of Samsung and Micromax. To become the number one smart phone retailer in India, Apple would need its own manufacturing units that would allow it to open many more retail stores and will go a long way in building its brand in the booming Asian economy.

What Apple intends to do is to replicate its China strategy in India by pitching for many tax breaks and other business incentives and benefits with the Central and State Government departments. Prime Minister Narendra Modi is trying to build a strong manufacturing base in India through his Make in India initiative. The Central Government gave foreign retailers an exemption from procuring 30% of goods locally for a period of 3 years. He is expected to do something similar for large scale manufacturers.

A major roadblock  for Apple and contract manufacturers is the fact that there are not many developed phone parts suppliers in India, and hence manufacturing becomes a challenge even when Apple is ready to invest money in manufacturing units.

It is believed that Apple has initiated a dialogue with the Modi Government and has shared a roadmap of their manufacturing plans in India. Apple already manufactures iPhones and iPads in South India with Foxconn.



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