Another Apple vendor, Foxconn, had started making iPhone 14 in India in September within 10 days of its global launch, underlining the US smartphone major’s bid to expand manufacturing of its latest devices in what is emerging as a key production base.
All the three contract manufacturers of Apple – Foxconn, Pegatron and Wistron – are in an expansion mode in India as the US giant looks to diversify manufacturing and cut reliance on China. Incidentally, Foxconn’s plant in Zhengzhou, China, which is the largest facility for iPhones in the world, has been under Covid-19 lockdown for the past few days.
Late Entry of Taiwanese Vendor
Following this development, noted Apple analyst Ming Chi Kuo, in a tweet on Friday, said Foxconn will accelerate the capacity expansion at its India plant. “As a result, iPhones made by Foxconn in India will grow by at least 150% on-year in 2023, and the medium/long-term goal is to ship 40-45% of iPhones from India (versus the current 2-4%),” Kuo said.
Pegatron was the last Apple supplier to enter the Indian market and started making iPhones in April this year with iPhone 12.
As per details available with ET, the firm plans to invest Rs 1,132 crore between FY2022-23 and FY2024-25 under the production-linked incentive (PLI) scheme. It will be participating for only four years since the company entered a year late. Other Apple suppliers – Foxconn and Wistron – will be getting incentives for five years.
As per guidelines for smartphone PLI scheme, global firms have to make a cumulative minimum investment of Rs 1,000 crore over four years. The companies are not required to commit investment in the last year of the five-year scheme. Since Pegatron is taking incentives for only four years, it has committed investment for the first three years.
According to the programme, global companies have to make a minimum incremental investment of Rs 250 crore in the first year over base year.
During the course of four years, Pegatron plans to produce iPhones worth Rs 94,349 crore, of which devices worth Rs 77,293 crore would be exported. The company is likely to give employment to 28,733 people. Pegatron has a manufacturing unit in Chengalpet, Tamil Nadu. Queries sent to Pegatron remained unanswered at the time of going to press. Apple did not offer a comment. So far, none of the Apple suppliers are making the Pro models in India, which are being imported. The PLI scheme for smartphones launched in 2020 was aimed at weaning away manufacturers from dominant geographies such as China and Vietnam.