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Apple’s big bite: Exports from India at Rs 10,000 crore

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MARCH 20, 2022

The iPhone models which have been exported the most are SE 2020, which is made by Wistron, followed by iPhone 11 and 12 which are being made by Foxconn. (Image: Reuters)

In what can be termed as establishing a strong footing in India, Apple will be closing FY22 with exports worth Rs 10,000 crore. In fact, this mark has been achieved by the company within the first year of starting production in the country under the production-linked incentive scheme.

Further, during the fiscal Apple was able to meet 75-80% of its total demand in India through domestic production. A year back it was able to meet only 10-15% of the demand through domestic production. Sources said that during the next fiscal, the company will be able to meet even higher percentage of domestic demand through its domestic output.

Apple phones are produced by its contract manufacturers and in India this export target has been achieved by two of its contract manufacturers, who have been selected under the PLI scheme — Wistron and Foxconn Hon Hai. Of the two, the larger share has been by Wistron as Foxconn Hon Hai was shut for two months (December and January) because of a food poisoning case. There’s a third contract manufacturer of Apple — Pegatron — which has also been selected under the PLI but will start production from April 1, so in its second year of operations, Apple’s export from the country will rise further.

While Wistron is located in Karnataka, Foxconn is located in Tamil Nadu.

The iPhone models which have been exported the most are SE 2020, which is made by Wistron, followed by iPhone  11 and 12 which are being made by Foxconn. Sources said Foxconn will soon start manufacturing iPhone  13 in India.

The domestic production story of Apple is barely a two year old phenomenon. The government unveiled its PLI scheme for smartphones in April 2020 and the selected companies started operations from August the same year. However, the first year was a washout because of Covid which disrupted the entire supply chain. The government later extended the duration of the scheme from five year period to six, giving the companies the option to select five years within this span. This way, Apple’s cycle under PLI started from August 2021.

Analysts said that Apple by its first year performance has achieved the objective set out by the government under the PLI scheme like shifting of global production base to India, making India the export hub for phones, and also catering to the domestic demand. The smartphone PLI was the first such scheme based on which the government expanded the same into several other sectors.

The total outlay for smartphone PLI over five years is Rs 40,951 crore and the incentive ranges between 4-6% annually. Companies have to meet incremental sales and production targets to qualify for the incentive.

Five global and local firms have been selected under the scheme. Apart from Samsung among the global ones, the other three — Foxconn Hon Hai, Rising Star, Wistron and Pegatron are contract manufacturers of Apple. These firms have to manufacture phones with invoice value of over Rs 15,000.

The Indian companies selected under the scheme are Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics.


Courtesy/Source: The Financial Express

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