Expected production for FY23 is also more than double the requirement for iPhone manufacturers combined to qualify for second-year incentives under the PLI scheme for smartphones. The scheme requires each of the contract manufacturers – Foxconn, Wistron and Pegatron – to make phones worth $ 8,000 million.
Market observers expect Apple to see record shipments of around 7 million units this year, giving it its highest ever market share of 5.5%, driven by huge demand for a broader portfolio of units and backed by higher local production and attractive financing schemes.
Yet India accounts for less than 1.5% of Apple’s global sales; over 60% of the production of iPhones will be for export – one of the primary goals of the PLI scheme, said people with knowledge of the matter.
The PLI scheme for smartphones was launched in 2020 in an attempt to accustom smartphone manufacturing away from China and Vietnam to India, especially in light of border tensions with Beijing.
Offers incentives in the form of 4-6% cashback over five years, and the scheme seeks to offset disabilities in the range of 10-15% that currently exists between India and its production rivals. The total cost of the scheme is DKK 40,951 million. DKK over five years.
Over the past 15 years, through contract manufacturers, Apple has built capacity to manufacture iPhones for $ 85-90 billion at factory price from China.
$ 6 billion in the second year of the PLI scheme
In India, the company is expected to produce phones worth over $ 6 billion at factory price in the second year of the PLI scheme, sources said.
None of the companies responded to email inquiries sent by ET.
iPhone production in India began in 2017 with the iPhone SE, and the locally made range now includes iPhones 11, 12 and 13.
Wistron in Bengaluru and Pegatron, which started production this month in Tamil Nadu, mainly make iPhones 12, while Foxconn makes iPhones 11, 12 and 13 at its Tamil Nadu plant.
Carried by the success of the PLI scheme for smartphones, which has also seen Samsung increase local production in India, the government launched 14 similar schemes across sectors such as IT hardware and white goods over the past two years.
One of the people familiar with the matter said that the total production of over Rs 47,000 crore iPhones expected in this financial year is possibly the largest joint production from any of the PLI schemes.
“While exports are certainly helping to achieve the desired forex, such a sharp increase in the production of electronic gadgets will also spur the demand for semiconductor chips in the country,” said Navkender Singh, research director at IDC India. Last December, the government announced a $ 10 billion incentive scheme for semiconductor manufacturing and design.