Apple helps Made in India program hit 2B phones, 98% locally made units

Apple helps Made in India program hit 2B phones, 98% locally made units

Made in India program | Apple Saket store in New Delhi

A new report highlights the success of the Made in India initiative, with a massive 2 billion mobile phones made in the country since the program was introduced.

Apple has been a major contributor to that stat, going from making only the iPhone SE in the country through to making the latest flagship models today – and more to come …

Made in India: Carrot and stick

The Indian government was keen to encourage smartphone brands to set up local manufacturing within the country, and created the Made in India initiative to do so.

The program was a mix of a carrot and a stick. On the incentive side, companies were offered generous tax breaks for local assembly. On the threat side, companies like Apple were threatened with import taxes on products for sale within India.

Additionally, a law aimed primarily at Apple meant the company was asked to hit a target of 30% production of locally sold products before it was allowed to open Apple Stores within the country. A lot of backroom dealing was done on that one, with some compromise reached to allow the first retail stores to open earlier this year.

A win-win for India and Apple

Apple has long been seeking to reduce its dependence on China as a manufacturing hub, so the tax breaks offered by the Made in India program helped accelerate those plans.

Apple initially limited Indian iPhone assembly to the iPhone SE back in 2017, but subsequently ramped up production to the full range – including the iPhone 14 last year. This year, iPhone 15 assembly is expected to begin simultaneously in both China and India.

iPad and Mac assembly is expected to follow. The Indian government first announced tax incentives for local assembly of tablets and computers back in 2021. Apple successfully negotiated a more generous deal in return for setting up iPad production lines in the country – though India is retaining its policy of stick as well as carrot, with an implied threat to speed things along.

Made in India achievements

Counterpoint Research reports that cumulative smartphone production under the program has now exceeded 2B units, with India now the second-largest phone manufacturing country after China.

Additionally, more than 98% of smartphone shipments within India are now manufactured inside the country.

We have seen local manufacturing increase over the years to meet domestic demand. In 2022, more than 98% of shipments in the overall Indian market were ‘Made in India’, compared to just 19% when the current government took over in 2014. We have also seen increasing local value addition and supply chain development in the country. Local value addition in India currently stands at an average of more than 15%, compared to the low single digits eight years ago. Many companies are setting up units in the country for manufacturing mobile phones as well as components, leading to growing investments, increasing jobs and overall ecosystem development.

Establishing a supply chain for locally made components will be a crucial step in Apple’s plan to remove the growing risks involved in Chinese manufacturing.

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