India is betting that many global brands will be willing to reduce their dependence on China.
Apple Inc.’s top iPhone assemblers are among the companies expected to gain approval to participate in a $ 6.6 billion stimulus program to bring manufacturing to India, according to people familiar with the matter, a potentially change. seismic as the world’s most valuable company diversifies further. China.
At a cabinet meeting on Wednesday, the government is expected to approve a plan aimed at generating $ 150 billion in mobile phone production over the next five years, said people who asked not to be identified because the matter is private. Among the dozen phone makers already approved by a high-powered government committee are Apple’s top vendor Foxconn Technology Group, which had filed two applications, and its peers Wistron Corporation and Pegatron Corporation, the people said. The three companies make virtually all iPhones sold globally in expanding factories that are currently primarily located in China.
Under the Production Linked Incentives Program, or PLI, as it is called, manufacturing incentives will increase each year in an ongoing effort to attract the world’s largest smartphone brands to manufacture their products in India and export. to the world. Besides Apple contractors, Samsung Electronics is the only other applicant for the five positions assigned to foreign companies. China’s largest phone makers, Huawei Technologies and BBK Group, which makes brands like Oppo and Vivo, are conspicuous by their absence.
Amid rising trade and political tensions between the US and China, India is betting that many global brands will be willing to reduce their dependence on China. If successful, the program could kick off a change in electronics manufacturing in the next five years.
“It is a thoughtful move by the government to entice Apple to bring a major iPhone manufacturing to India because when the iPhone maker changes, it follows a whole ecosystem,” said Hari Om Rai, president and founder of Lava. International Ltd., the largest local company in India. phone manufacturer. “The next five years will be dramatic and India could become the new China in phone manufacturing.”
Lava, based in the New Delhi suburbs, is among the Indian phone makers applying for manufacturing incentives, along with Karbonn Mobiles and Dixon Technologies India Ltd.
To receive the incentives, foreign manufacturers, including Foxconn, Wistron and Samsung, must commit to specific investment and production targets for devices that sell for at least 15,000 rupees ($ 200); Indian phone manufacturers will not have such restrictions. Last month, Ravi Shankar Prasad, the Minister of Electronics and Information Technology, told reporters that Apple accounts for 37 percent and Samsung for 22 percent of the share of global mobile phone sales revenue. The incentive scheme “would increase its manufacturing base in the country,” the ministry said in a statement.
Apple did not respond to requests for comment.
Pegatron, the second-largest iPhone assembler after Foxconn with several factories in China, said in July that it would establish a plant in India. Apple represents more than half of Pegatron’s business. If approved, the first Pegatron factory in India would be eligible for PLI, the people said.
In the next five years, India could attract an additional 10 percent of global phone production, Credit Suisse said in a recent note. And while the country is the world’s second-largest phone market with plenty of room for domestic sales growth, the government’s clear goal is to eventually become a global manufacturing colossus to rival China. Nearly two-thirds of the stimulus program is aimed at the export market, the people said.
Pankaj Mohindroo, president of the India Cellular and Electronics Association, a trade group representing major phone makers including Apple, Oppo and Xiaomi, said incoming phone makers will be joined by a number of smaller sub-assemblers and component makers. , expanding the sector to seven times its current size in the next five years.
“India’s incentive scheme will be a game changer that will make the country number one in mobile device manufacturing, or at least a close second by 2025,” Mohindroo said.
(Except for the headline, this story has not been edited by NDTV staff and is posted from a syndicated feed.)
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