Apple in talks to begin India manufacturing

Posted on 21 Dec 2016 by Michael Cruickshank

US consumer electronics firm Apple is reportedly in talks to move some of its manufacturing capacity to India.

This information was revealed this week by the Wall Street Journal citing two senior officials within the Indian government.

Apple has allegedly been in discussions with the country following a letter sent to the Indian government outlining their interest in setting up a factory there.

Within this letter they also reportedly asked for financial incentives to persuade them to move ahead.

Apple, for its part, has yet to comment on these reports. Earlier, in May this year CEO Tim Cook said he had no plans to set up a factory in India.

While this appears to have changed, it is as-yet unclear what the scope of this move towards Indian manufacturing will be.

Much has been said about the rising cost of Chinese manufacturing, and whether this might force companies to look elsewhere, however this does no appear to be Apple’s motivation in this case.

Rather the company likely sees an Indian manufacturing plant as a way for it to help gain a larger foothold in one of the world’s largest smartphone markets.

Having Indian assembly plants for its devices would enable the company to open Apple stores within India in compliance with a law stipulating that 30% of the goods sold must be manufactured locally.

Apple moving manufacturing to India would be a significant win for Prime Minister Modi’s ‘Make in India’ program, however the country is unlikely to replace China as a major manufacturing hub in the near future.

In the past Apple has said that its use of Chinese factories had little to do with cost, and more to do with its skilled labour and industrial flexibility, something which India at this stage lacks.

Conversely, a move to Indian manufacturing, however small, is likely to upset the incoming Trump Administration which has pledged to bring manufacturing back to the US.

“I’m going to get Apple to start making their computers and their iPhones on our land, not in China,” the President-Elect claimed earlier this year.