Wednesday, 09 Oct, 2024
By: Damini Mehta
Image Source: Thestatesman
Apple has manufactured a record Rs. 1 lakh crore worth of iPhones in India in 2023. 65% of Rs. 65,000 crore worth of iPhones were exported taking the total mobile exports of India to Rs. 90,000 crore.
As the COVID-19 pandemic and the Russia-Ukraine conflict put a question mark on the supply chain linkages in global trade, top manufacturers and companies across the world started to look for diversification of manufacturing and supply beyond traditional locations such as China. India, with low labor costs and a government keen on promoting manufacturing and inviting foreign investment, several top MNCs started to look towards it to set up a basis and make use of a favorable policy environment. As the government of India has sought to create a brand value around ‘Make in India’, manufacturing firms are taking benefits of policies such as the Production Linked Incentives Scheme to set up manufacturing units in India.
A recent report by Counterpoint, a global technology research firm, shows how Apple Inc is making use of the ecosystem to become one of India’s leading smartphone manufacturers. Apple has manufactured a record Rs. 1 lakh crore worth of iPhones in India in 2023. 65% of Rs. 65,000 crore worth of iPhones were exported taking the total mobile exports of India to Rs. 90,000 crore. According to the report, Rs. 1 lakh crore is the FOB or Freight on Board value of the phones referring to the consignment value when it leaves the factory whereas the actual market value of the phones might be anywhere between Rs. 1.5 and 1.7 lakh crore depending on taxes and dealer margins of different countries.
Apple operates in India on a contractual manufacturing format with Foxconn, Pegatron and Wistron being its three key contract manufacturers producing models ranging from iPhone 11, 12, 13, 14 to iPhone 15, a majority of which are exported to the US, Europe and West Asian Markets. All three contract manufacturers of Apple were under the central government’s PLI scheme and have exceeded the production targets under the same. As a result of the above developments, Apple’s market share in India has increased 3 fold from 2% to 6% in the last five years becoming the first standalone brand to cross the $5 billion export mark from India in financial year 2023.
Higher incomes leading to increased purchasing power capacity coupled with a young population has contributed to an ever expanding smartphone and digital devices market in India. Consumers are shifting from low cost mobile phones to mid and high range smartphones with a bouquet of features. This makes India a lucrative market for smartphones and digital devices and a hot destination to set up production units and benefit from a favorable policy environment.
