Indian govt asks Apple to generate revenue $50 billion a year in India

The
Indian government has proposed American technology giant Apple generate annual
production output worth $50 billion in India over the next 5-6 years and expand
its locally-made product kitty beyond iPhones to include Macbooks, iPads, air
pods and watch.

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According
to Times of India, the government officials had held a high-level meeting with
Apple’s decision-making body urging them to set up its production hub in India
to develop the country as a global sourcing base which would be used to export
fully-built products across the world, on similar lines to what is being
achieved out of China currently.

Apple’s
production in India is at present is little compared to its global needs. India
started asking Apple to set up its production hub in the country after the
Taiwanese trio of Foxconn, Wistron and Pegatron, have set up a base in India.

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Currently,
Apple’s majority of production – around 95 per cent – happens in China.  Foxconn and Wistron are already manufacturing
for Apple in India, though the volumes are “near negligible” when compared to
the company’s bulk manufacturing in China. The company only makes the iPhone in India
currently (the latest iPhone13 is still not made here), a part of which is also
exported, though other products from its portfolio are not made here and simply
imported.

“The
meeting with the Apple officials happened recently, where senior members of the
government – including a top minister – were present. The government 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. The
enabling environment includes production-linked incentive (PLI) schemes to
encourage companies to invest in, and grow, manufacturing in India. Also,
capital subsidy plans are being given out, such as the one allotted for
kickstarting semiconductor manufacturing where the government has extended a
support of $10 billion for those willing to invest,” a top government official
was quoted by Times of India.

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In
the 2020-21 fiscal year, Apple generated $3 billion in revenue from India,
registering a growth of 68%, though a large part of this turnover came from
products that had been imported (largely China) and not made in the country.

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The
manufacturing potential surely looks large for India. Apple’s global sales
revenue in the company’s fiscal year, which ended September 25, 2021, stood at
a whopping $365 billion, of which $191 billion came from iPhones, while around
$67 billion came from Macbooks and iPads. Wearables such as air pods and
watches turned in another $38 billion.