Thanks to the incentive policy for mobile phone manufacturing offered by the Indian government and a need to diversify production away from China, Apple suppliers reportedly met their production and export targets in India and may be eligible for lucrative incentives.
According to Business Standard, Apple suppliers, which are eligible for India's production-linked incentive (PLI) scheme for large-scale electronics manufacturing, outperformed expectations on five out of six monitored parameters set by the government. These include incremental production value, exports, investment, and freight on board (FoB) value.
According to the report, Foxconn, Pegatron, and Tata Electronics collectively exceeded these benchmarks. Data provided to government agencies reveals that the combined production value of iPhones assembled by these vendors in fiscal 2024 (April 2023 to March 2024) amounted to INR1,948 billion (US$23.23), representing a substantial 45% increase over the committed targets specified in the PLI scheme for that period.
In fiscal 2024, Apple suppliers exported iPhones valued at INR1,402.8 billion, surpassing their export targets by 43%. Additionally, their investments in the same period exceeded the committed INR22.5 billion. Notably, the production cost of the iPhones they assembled was double the mandated minimum FoB value of INR15,000 under the scheme.
For parameters not linked to the PLI scheme, Apple suppliers surpassed their target of creating 77,000 direct jobs in fiscal 2024. However, in terms of value addition, they are falling behind. Under the PLI scheme, the government aimed for a 21% value addition in mobile devices by fiscal 2024, with targets increasing to 35-40% by fiscal 2026. Apple suppliers have achieved only 12-15% in value addition.
As most iPhones produced in India are exported overseas, India has become a major exporter of the product. According to data from the Ministry of Commerce and Industry, smartphones exported from India grew by 42.15% year-on-year in fiscal 2024 to US$15.57 billion, while smartphone exports by China declined by 2.56% for the same period.
Apple is stepping up its efforts to build a local supply chain in India that relies more on domestic providers. After acquiring Wistron's Indian assets for iPhone manufacturing, Tata Electronics is reportedly in advanced talks with Pegatron for a similar deal, possibly leaving Foxconn as India's sole Taiwan-based iPhone assembler.
