Apple making phones, parts in India for export, says Ravi Shankar Prasad

Premium phone maker Apple has started making mobile phones and components in India for export, and is on board as far as the India success story is concerned, said Union minister for electronics and information technology Ravi Shankar Prasad on Monday.

Prasad was addressing reporters after talks with senior officials of 34 smartphone and consumer electronics companies. The meeting was attended by executives from Apple, Samsung, Xiaomi and OPPO, among others.

“Apple has started manufacturing phones in India, including components. I am making this announcement publicly that now they have come to India, they have started making phones for export. They have also started making components for export. This is just the tip of the iceberg. I want a robust presence of Apple in India,” Prasad said.

The California-based phone maker assembles its iPhone 6S and iPhone 7 models at a facility in Bengaluru through contract manufacturer Wistron.

Apple did not respond to emailed queries on its manufacturing and export plans for India.

The company has a marginal 1.6% share of the Indian market, which is dominated by China’s Xiaomi, OPPO and Vivo.

Prasad’s statement comes two weeks after the Union government relaxed norms, which required companies to source 30% of their production locally, to now include exports as part of that requirement. Foreign single-brand retailers have also been permitted to start online sales before opening physical stores, provided the brick-and-mortar outlets come up in two years from the time it starts selling online.

The new rules mean that in the near term, India could be home to Apple’s iconic physical stores where consumers also often end up exploring its other products and services.

This also comes at a time when Apple is looking to slowly shift its manufacturing from China, given the trade tensions between Washington and Beijing. The phonemaker has asked its major suppliers to evaluate the cost implications of shifting 15% to 30% of their production capacity from China to South-East Asia, as it prepares for a fundamental restructuring of its supply chain, the Nikkei Asian Review reported in June.

Meanwhile, the Indian government wants to attract more companies, and make the country a manufacturing and exports hub for mobile phones and consumer electronics. A detailed policy with incentives for such companies is expected to be unveiled in 2-3 months, according to Prasad. “The real moment has come for India to manufacture for the world.”

The government has set a target of a sevenfold jump in electronics production to $400 billion by 2025, from $70 billion in 2018-19. It will now set up a task force to create a road map to make sure companies have a favourable working environment.

“India offers a huge market. It will offer you friendly policies, incentives. We are also open if you (companies) have a facility just for exports also,” Prasad said.

In 2014, there were only two mobile phone and accessories manufacturing units and India assembled 60 million mobile phones. This has increased to 268 manufacturing units and 290 million mobile phones in 2018. Mobile parts are imported and phones are assembled here. “We need to aim for greater import substitution and also open up exports from India. Mobile phones segment will be a major area for boosting exports,” Ajay Prakash Sawhney, secretary, ministry of electronics and information technology had told reporters on Friday.