Introduction
Apple is ramping up its Indian supply chain by partnering with over 40 local companies, including Dixon, HCLTech, and Wipro. This strategic shift comes as challenges with Chinese suppliers grow due to strained India-China relations. By deepening its local manufacturing capabilities for products like iPhones, iPads, and AirPods, Apple is leveraging India’s production-linked incentive (PLI) schemes to enhance global production and reduce dependency on China.
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Brief Overview:
- Apple has partnered with over 40 Indian companies, including Dixon Technologies, HCLTech, Wipro, and Motherson Group.
- The move is driven by strained relations between India and China, prompting Apple to seek alternatives to Chinese suppliers.
- Apple plans to ramp up local production of iPhones, AirPods, and iPads in India with support from local companies.
- The Indian government’s Production-Linked Incentive (PLI) scheme has been instrumental in boosting Apple’s local manufacturing operations.
- Apple aims to assemble 32% of its global iPhone production volume in India by FY27, with a projected $34 billion in production value.
Background: The Need for a Diversified Supply Chain
Apple decision to deepen its supply chain ties with Indian companies comes at a time when its relationship with Chinese suppliers has grown more complicated.
These tensions have intensified due to the ongoing geopolitical conflicts between India and China, particularly after the 2020 Galwan Valley clash.
Several Chinese companies have faced legal and tax challenges in India, which has disrupted their ability to operate efficiently.
For instance, BYD, a key supplier for iPad manufacturing, was recently denied clearance to operate in India.
This move, along with other obstacles faced by Chinese firms in India, has prompted Apple to accelerate its efforts to diversify its manufacturing base within India itself.
Apple’s Strategic Shift to Indian Suppliers
To ensure a smooth transition, Apple has been engaging in extensive discussions with Indian companies, exploring new partnerships and joint ventures with global supply chain from countries such as China, Taiwan, and Japan.
These ventures are crucial for manufacturing essential components like displays and camera modules within India.
The move also aligns with Apple’s long-term plan to reduce its dependence on Chinese suppliers and minimize potential disruptions in its supply chain.
Key Partnerships with Indian Companies
The strategic partnerships with Indian companies are not limited to just suppliers of components.
Apple is also working closely with Indian IT giants such as HCLTech and Wipro, as well as major electronics manufacturing service providers like Dixon Technologies and Motherson Group.
These companies are playing a critical role in manufacturing Apple’s products locally, which will help the tech giant mitigate some of the risks posed by reliance on Chinese manufacturers.
India’s position as a manufacturing hub for global companies continues to strengthen, with Apple expected to further expand its partnerships with local firms.
Some of the key products that will benefit from this shift include iPhones, which are already being produced in India in large quantities.
Apple is also working on local production for AirPods, MacBooks, and iPads.
Apple’s Focus on Local Manufacturing
Apple’s local manufacturing initiatives are not only limited to assembling smartphones. The company is expanding its focus to include more of its product portfolio.
AirPods, for instance, are currently being assembled in Pune by Jabil, a U.S.-based manufacturing services provider.
Additionally, Foxconn, one of Apple’s largest suppliers, will begin AirPods production in Telangana next year. Apple Explores Broader Local Production
Apple plans to produce iPads locally in India. This follows a shift of some iPad production to Vietnam last year. The company aims to expand manufacturing for multiple devices in India.
Government Support Through PLI Scheme
The Indian government plays a key role in Apple’s expansion. The Production-Linked Incentive (PLI) scheme has been a game-changer. It encourages companies like Apple to invest in local manufacturing.
Since 2020, Apple has invested $14 billion in India. Partnerships with Foxconn and Tata Electronics have boosted local production.
The PLI scheme helps create a robust electronics ecosystem. It attracts global players and supports the growth of Indian suppliers.
Apple plans to increase production further in the coming years.
India’s Growing Importance for Apple
India is a vital market for Apple’s growth. In FY24, Apple’s net profit in India rose by 23% to Rs 2,745.7 crore. Revenue increased by 36%, reaching Rs 67,121.6 crore. iPhone sales have been a major driver of this growth.
Apple now holds 8.6% of India’s smartphone market. The company aims to capture a larger share. With rising production and sales, India is central to Apple’s global strategy.
India’s Role in Apple’s Global Manufacturing Strategy
Apple is preparing to ramp up local production significantly in the coming years. By FY25, India will contribute 17-18% of Apple’s production volume.
The production value is projected to reach $18 billion. By FY27, Apple plans to assemble 32% of its iPhones in India. This could result in a production value of $34 billion.
India’s Role in Apple’s Strategy
India is key to Apple’s long-term plans. Geopolitical tensions and supply chain issues in other regions are driving this shift.
India’s manufacturing ecosystem is growing rapidly. The country is becoming an important hub for Apple’s global operations.
Conclusion: Strengthening Supply Chains
Apple’s move to expand in India is strategic. It reduces reliance on Chinese suppliers. Partnerships with over 40 Indian firms strengthen Apple’s local supply chain.
This growth supports India’s economy through jobs and innovation. Government schemes like the PLI program have boosted local manufacturing.
Apple’s success in India is a model for other global firms. It highlights the importance of diversifying supply chains for future resilience.
