Three top Apple suppliers to commit $900 million to
India smartphone incentive plan: sources
Send a link to a friend
[September 28, 2020] By
Sankalp Phartiyal
NEW DELHI (Reuters) - Three of Apple Inc's
top contract manufacturers plan to invest a total of almost $900 million
in India in the next five years to tap into a new production-linked
incentive plan, according to two sources familiar with the matter.
Foxconn, Wistron and Pegatron all plan to make investments under the
scheme, said the sources, who asked not to be named as the discussions
are private.
India's new $6.65 billion production-linked incentive (PLI) scheme
offers companies cash incentives on any increase in sales of
locally-made smartphones over the next five years, compared with 2019-20
levels. The scheme aims to help transform India into an export
manufacturing hub.
Foxconn has applied to invest about 40 billion rupees ($542 million),
while Wistron and Pegatron have committed to invest close to 13 billion
rupees and 12 billion rupees, respectively, under the PLI plan, the
sources said.
It is unclear whether all of the investment will be targeted at boosting
manufacturing of Apple devices in India, but the sources and industry
insiders said the vast majority would be focused on expanding iPhone
manufacturing in the country.
Foxconn said that as a matter of policy it did not comment on specific
operations or work for any customer. Apple, Wistron, Pegatron and
India's technology ministry, which formulated the PLI scheme, did not
respond to emails seeking comment.
While Foxconn, Pegatron and Wistron make devices for companies other
than Apple globally, Wistron's arm in India currently assembles only
iPhones.
Wistron, which assembles roughly 200,000 second-generation iPhone SEs
per month in India, plans to scale that up to 400,000 a month by the end
of the year, one of the sources said, as it looks to cater to export
demand for the device.
That plan is expected to create roughly 10,000 jobs, the source added.
[to top of second column] |
A salesman checks a customer's iPhone at a mobile phone store in New
Delhi, India, July 27, 2016. REUTERS/Adnan Abidi/File Photo
Pegatron is yet to start Indian operations, but has been in talks with several
states, with Tamil Nadu in the south emerging as a frontrunner for a planned
plant to manufacture Apple devices, a third source said.
Foxconn, which also assembles devices for Xiaomi in India, already has enough
capacity to meet Xiaomi's needs and is likely to use the PLI plan largely to
boost iPhone production, a fourth source said.
The commitments would help Apple diversify its supply chain beyond China, which
is locked in a trade war with the United States.
Apple started assembling in 2017 a low-cost iPhone model in India through
Wistron's local unit in the tech hub of Bengaluru. It later ramped up
production, with Foxconn beginning to assemble iPhones last year and Wistron
widening operations.
"India is key to Apple's global ambitions as it expands beyond China," said
Tarun Pathak, an associate director at tech researcher Counterpoint. "It offers
a strategic market to them where skilled labour is cheaper as compared to other
manufacturing destinations, the size of the internal market is huge and the
export potential is enormous."
Local manufacturing helps Apple save costly duties levied on imports of
fully-built phones and components in India, where the Cupertino,
California-headquartered tech giant accounts for just 1% of smartphone
shipments.
Apple is looking to change that. It launched its online store in India last
week, and is building its first company-run retail store in the financial hub of
Mumbai.
($1 = 73.7907 Indian rupees)
(Reporting by Sankalp Phartiyal; Editing by Mark Potter)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |