Apple first sought to assemble the iPhone in India in 2016. The local government rejected most of Apple’s requests, but in any case, the company still started the Indian local production plan for the iPhone SE.
And Apple’s supplier, the iPhone manufacturer, did eventually get the tax relief it sought: the ability to import iPhone components into China without paying any import taxes.
Currently, Apple is continuing to seek incentives to increase the proportion of iPhones produced in India. Last year, the Indian government announced a plan to reward smartphone manufacturers for increasing production. These incentives account for 4% to 6% of the value of the phone, depending on sales.
Apple has been working hard to reduce its dependence on China as a manufacturing center. A report a few months ago stated that iPad production may expand to Vietnam this year. Another report last month pointed out that many iPad product manufacturing will leave China.
According to Reuters, the Indian government is currently preparing similar plans for tablets, laptops and servers. Three sources told Reuters that the government is preparing to introduce another incentive to promote the production of local IT products, including tablets, laptops and servers. The incentive program will provide manufacturers with funds to return export cash. The budget for the next five years will be as high as 70 billion rupees (about 964.5 million US dollars) and is expected to be launched at the end of February.
Apple is lobbying to increase the budget to 200 billion rupees. Because India lacks a supply chain for manufacturing IT products, most components need to be imported from China.
Reuters quoted unnamed government and industry sources as saying that if an agreement is reached with the government, Apple will “plan to bring iPad tablet manufacturing to South Asian countries.”
For some time in the past, Apple suppliers have been working hard to meet the requirements of customers for establishing a diversified production base. At the end of last year, Foxconn invested US$270 million to establish a subsidiary in Vietnam. Luxshare Precision, as a new iPhone assembler and an AirPods foundry manufacturer, is expanding HomePod mini production capacity in northern Vietnam.