Apple reportedly weighing shifting some production from China to India

"We expect Apple to produce up to $40 billion worth of smartphones, mostly for exports through its contract manufacturers Wistron and Foxconn, availing the benefits under the production-linked incentive (PLI) scheme," a senior government official told ET.

If this happens, iPhone maker could become India's largest exporter, say experts.

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Currently, Apple sells phones worth some $1.5 billion in India, of which less than $0.5 billion is locally manufactured, and has market share of some 2-3%. In contrast, Apple is a top investor in China. In 2018-19, it produced merchandise valued at $220 billion in China, of which it exported goods worth $185 billion, according to industry experts. It directly and indirectly employs about 4.8 million people there.

India is looking for a bigger slice of the global exports pie, another senior government official said. The PLI scheme had been designed to address disadvantages global supply chains faced in India vis-à-vis say China and Vietnam.

The PLI scheme for large-scale electronics manufacturing was notified on April 1 and offers a production-linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including Assembly, Testing, Marking and Packaging (ATMP) units

“We realised companies weren’t relocating manufacturing to India because there were disabilities of almost 10%, so PLI addresses about 6% disabilities, the RoDTeP scheme another 0.27%, and the corporate rate tax cuts address the balance,” said the second official. RoDTeP or Remission of Duties and Taxes on Exported Products is another scheme to incentive exports

A company must manufacture at least $10 billion worth mobile phones in a phased manner between 2020 and 2025 to avail the benefits of the PLI scheme. The selected applicant is required to meet targets on a yearly basis.

“We don’t have ecosystem ready, which could support any large-scale deployment. The ecosystem right from skilling to ancillaries is almost negligible. This weakens confidence of anyone wanting to plan big and long term,” said Faisal Kawoosa, founder at research agency TechArc.

He added that instead of positioning ‘Make in India’ as a competing programme, India should have projected it as complimenting the global supply chain.