Diversifying supply chains: Apple vendor eyes production shift to India

NEW DELHI: In a major relocation from China as part of global business’ effort for derisking of manufacturing bases by diversifying supply chains, a contract manufacturer for Apple is shifting six production lines looking forward to exporting around $5 billion worth of iPhones from India apart from catering to the domestic market.

The establishment of the facility is expected to generate employment for around 55,000 Indian workers over a year or so, sources familiar with the exercise told TOI. The vendors may expand the operations beyond phones to include tablets and even computers and laptops in the coming years.



China has come under increased scrutiny after the Covid-19 global health crisis as it tried to suppress the outbreak in Wuhan. With trade tension already mounting and Beijing’s role under the lens, several global giants are looking to diversify their production bases across the world. India has aggressively moved in seeking to be part of the new production supply chain.

Container loads of goods from Apple’s key contract manufacturer have already reached India in the wake of the pandemic and China’s initial attempt to smother information about its outbreak.

As reported by TOI in its edition on Saturday, Apple’s contract manufacturers, Wistron, Pegatron and Foxconn, Korean giant Samsung along with Indian players such as Dixon Lava and Micromax will manufacture mobile phones under the government’s production-linked incentive scheme. Foxconn already has a plant, while Wistron and Pegatron are likely to follow suit.

In all, 22 domestic and global players applied under the scheme that will result in production to the tune of Rs 11.5 lakh crore over the next five years, with exports estimated at Rs 7 lakh crore, communications and IT minister Ravi Shankar Prasad told reporters. Overall investments are estimated at around Rs 11,000 crore under the scheme.

In addition, several component manufacturers have also filed applications that will lead to production of electronic components to the tune of Rs 45,000 crore.

Prasad’s ministry has been in talks with global giants to ensure that they invest in India, which is one of the largest markets for smartphones, going to the extent of facilitating registration for companies such as Pegatron in a day. The push for phone making coincides with recent investments by global tech giants such as Facebook and Google in Reliance Jio, which is now getting into the business of Android-based smartphones at affordable prices.

The three key Apple vendors, which are looking to produce phones in India, are Taiwan-owned entities and points to the growing rush of companies away from China given the geo-political risk.