As Apple sharpens its focus on the Indian market, the American tech behemoth’s top contract manufacturers gear up to expand their production facilities in the South Asian nation.
Taiwanese giants Foxconn, Wistron, and Pegatron, Apple’s top three manufacturers, are planning to invest a total of about USD 900 million in India over the next five years, a report by local media Economic Times (ET) said, citing sources.
These companies will, in turn, leverage the new production-linked incentive (PLI) scheme floated by the Indian government earlier this year to boost domestic manufacturing and attract large investments in mobile phone manufacturing.
The new USD 6.65 billion PLI plan offers companies cash incentives of four to six percent on any increase in sales of locally-made mobile phones and its components over the next five years, compared with 2019-20 levels.
The move by the Indian government is in line with its vision to make the country an electronics manufacturing hub.
While Foxconn is looking to invest about INR 4,000 crore (USD 542 million), Wistron and Pegatron have plans to pump in close to Rs 1,300 crore (USD 176 million) and Rs 1,200 crore (USD 162 million), respectively, under the PLI plan, the report noted.
Globally, all the three companies produce devices for companies other than Apple, however, Wistron’s India arm assembles only iPhones at present. According to industry experts a majority of the investments from these three firms would go towards expanding the iPhone manufacturing in the country.
Foxconn has enough capacity to meet the need of its other client in India, Chinese device maker Xiaomi, and is likely to tap PLI plan to enhance its iPhone production capability. Wistron currently assembles about 200,000 second-generation iPhone SEs per month in India, which it plans to scale up to 400,000 a month by 2020 end. This will help Wistron cater to the export demand for the device, the ET report said.
Meanwhile, Pegatron hasn’t yet started operations in India and is in talks with several states including the Southern Indian state of Tamil Nadu to set up a plant to manufacture Apple devices.
The development comes at a time when Apple is looking to diversify its supply chain beyond China amidst the ongoing trade war between the US and China. Apple, which has been present in India for more than two decades, started assembling low-cost iPhones in the country in 2017 with Wistron. Last year, it tied up with Foxconn to assemble newer models of iPhones, while Wistron expanded its iPhone manufacturing operations.
Assembling phones locally has helped the company save on import duties that are posed on fully-built phones and components. Last week, the Cupertino, California-headquarters opened its first-ever online store in India, which will have an entire line-up of its products along with a range of consumer services for the first time the country.