Apple may shift a quarter of its global production to India from 5-7% now, commerce and industry minister Piyush Goyal said on Monday, showcasing the tech giant’s plan as a sign of the country’s emerging strength as a global manufacturing base.
“They (Apple) launched the most recent models from India, manufactured in India,” the minister said at the inaugural session of the B20 India Inception Meeting, organised by the Confederation of Indian Industry (CII) here.
“If I am not mistaken, they are targeting to go up to 25% of their manufacturing,” he added. The minister, however, did not specify the timeframe by which the California-based firm will expand its production facility in India.
Apple has been assembling its flagship iPhone 14 in India since 2017. It is setting up its largest manufacturing unit in the country in Hosur near Bengaluru. Its plan to scale up manufacturing in India is in consonance with the strategy to diversify more of its supply chain away from China. J P Morgan estimated last year that a quarter of all Apple products would be made outside China by 2025.
Goyal said India offers a rule of law and transparent government policies and business models which help enterprises.
In November last year, telecom and IT minister Ashwini Vaishnaw had said that the Hosur facility, the biggest unit to manufacture iPhone in India, will employ around 60,000 people. Apple gets iPhones manufactured by electronics giants – Foxconn, Wistron and Pegatron in India. Foxconn has already revealed its plans to quadruple the workforce at its iPhone factory in India over the next couple of years.
Speaking about India’s macroeconomic situation, Goyal said this would be a “challenging year” for the world, with inflation in several countries being “very high,” but added that India has managed to reduce price pressures. During the tenure of the ruling National Democratic Alliance, average inflation would be around 4.5%, he said, adding that in the period of the UPA-II government, inflation rates were much higher.
Goyal said with a large aspirational population which had a hunger for better things in life, as their basic needs had been taken care of, India was emerging as a magnet for products like dishwashers, dryers, washing machines and mobile phones.
China’s Covid-related lockdowns and restrictions, and rising trade and geopolitical tensions between Beijing and Washington, have influenced Apple’s plans to shift production elsewhere.
Goyal said in 2014 when the Narendra Modi government assumed office, interest rates were costlier at around 14%.”But it was with the government of India’s efforts that now the interest rates have reduced to 6-7% for an average-sized industry and about 8-9% for an MSME. The current situations of war and the Covid-19 pandemic has impacted the interest rates in recent times,” he said.