Apple set to manufacture iPhones in Bengaluru

Apple’s manufacturing plant is expected to come up in Peenya Industrial Area of Bengaluru


Apple has reached an agreement with the Karnataka government to set up a manufacturing plant in Peenya Industrial Area of Bengaluru. Photo: Reuters
Apple has reached an agreement with the Karnataka government to set up a manufacturing plant in Peenya Industrial Area of Bengaluru. Photo: Reuters

Bengaluru: Apple India Pvt. Ltd, the Indian arm of the Cupertino, California-based iPhone maker Apple Inc., seems to have reached an agreement with the Karnataka government to set up a manufacturing plant in Peenya Industrial Area of Bengaluru.

The Karnataka government has issued a statement confirming the news.

“Apple’s decision on initial manufacturing in Bengaluru has further enhanced the reputation of Bengaluru as the most preferred destination for foreign investment and further validation of the State Government Policies aimed at fostering manufacturing, innovation and investments in Karnataka,” the state IT department said in a statement Thursday.

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The statement, attributed to Karnataka’s information technology (IT) minister Priyank Kharge, added that Apple’s representatives, led by Priya Balasubramaniam, vice president, iPhone operations; Ali Khanafer, head, government affairs; Dheeraj Chugh, director, iPhone operations; and Priyesh Povanna, country counsel, met ministers and officials of the Karnataka government and had positive discussions about manufacturing initiatives. It did not provide more details.

A few hours before the statement was announced, Kharge said in an interview that he was sure “considering the dynamic (nature of the) city, investment climate, (availability of) skilled manpower, Apple will come to the state.”

Apple is expected to start production for the Indian market in April, Kharge said, as it has tapped Taiwan’s Wistron Corp. to put together its phones in Bengaluru.

“Apple’s iPhones will be made in Bengaluru and all devices will be targeted at the domestic market,” said Kharge. The state government will help Apple if it decides to turn to other contract manufacturers in the region.

“We did not discuss any other incentives,” he said.

Although the electronics giant has been tight-lipped about its plans in the country, news of the iPhone maker setting up a facility in Bengaluru has been doing the rounds for some time now.

The Times of India first reported this on 30 December.

Apple has chosen Taiwan-based contract phone maker, Wistron Corp., as its manufacturing partner in India. And Wistron is believed to have identified a facility in Peenya, an industrial suburb of Bengaluru.

The company will make phones for the Indian market in the first phase of its operations.

Apple has been in talks with the Indian government seeking tax concessions, a conducive ecosystem and exemption from local procurement norms.

Apple and Wistron did not respond to e-mails seeking comment.

Apple India reported a profit of Rs294 crore in the year ended 31 March 2016 on revenue of Rs9,997 crore. It recorded sales of over $1 billion in India in 2015, highlighting the growing importance of this market, according to results filed with the registrar of companies.

The company currently sells its products in India through exclusive arrangements with chain stores such as Imagine and iStore (owned by Reliance Digital). In 2012, Apple India changed its sales model by appointing retail distributors and began advertising; it has seen double digit growth rates since, Mint reported on 4 January.

Apple’s chief executive Tim Cook on Tuesday said the company is in discussions with the Indian government to open retail stores in the country, a market which according to him has seen “all-time record revenue results” despite the government’s decision to demonetize high-value currency notes, Wall Street Journal reported on Wednesday.

In May 2016, the company opened its first development centre in India in Hyderabad to work on Apple Maps, the company’s digital maps and navigation service. Apple acquired Hyderabad-based machine-learning start-up Tuplejump Software Pvt. Ltd for an undisclosed amount in September.

PTI , Bloomberg contributed to this story.

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