Topline
Apple wants to expand its manufacturing in India to 25% of all its products, Indian Commerce Minister Piyush Goyal said Monday, adding credence to reports that the iPhone maker is looking to move large parts of its manufacturing out of China and reduce its dependence on the country following disruptions last year.
A man rides a scooter passes by an Apple iPhone 14 billboard in Mumbai, India.
Key Facts
Speaking at a business conference on Monday, Goyal talked up India’s potential as a global manufacturing hub and called Apple “another success story” in this regard.
Goyal said India already accounts for “about 5-7%” of Apple’s total manufacturing output and added, “they are targeting to go up to 25%.”
Goyal also noted that Apple has started making its most current iPhone model, the iPhone 14, in India—a shift from an earlier strategy where only older and budget models were made in India.
The Indian minister, however, did not offer details on when he believes Apple could reach the 25% target.
Forbes has reached out to Apple for a response.
News Peg
Goyal’s estimates are in line with forecasts made last year by JP Morgan that projected Apple will move 5% of global iPhone 14 manufacturing to India by the end of 2022 and expand to 25% of all iPhone manufacturing by 2025. As part of this expansion, Apple is trying to bring in its Chinese suppliers to set up base in India. Last week, various Indian news outlets reported India’s government granted preliminary clearances to 14 of these Chinese suppliers, who will now be required to set up a joint venture with a local firm—a requirement that Indian government officials say is essential to ensure that Indian companies gain manufacturing expertise and other benefits.
Key Background
The minister’s remarks come as Apple is reportedly making efforts to reduce its dependence on China, where it manufactures a bulk of its products. These efforts follow years of growing trade and geopolitical tensions between the U.S. and China and major disruptions to the company’s supply chain last year due to Beijing’s harsh Covid lockdown policies. According to Bloomberg, Apple fell short of its production target for its latest iPhone 14 models by nearly 6 million units worldwide as a result. Protests in Zhengzhou—the world’s largest iPhone factory—saw workers clash with authorities while protesting delayed bonus payments and poor living conditions as nearly all of Apple’s flagship iPhone 14 Pro and Pro Plus models were being manufactured in the factory, which led to stock shortages and long wait times of over six weeks for people looking to buy the top-tier models.
Tangent
The iPhone maker is set to open Apple stores in India for the first time this year. The stores are part of a deal Apple inked with Indian conglomerate Tata last year to open 100 stores across the country, starting with the city of Mumbai.
Further Reading
Apple wants to manufacture 25% of its iPhones in India, minister says (CNBC)
Source: https://www.forbes.com/sites/siladityaray/2023/01/23/apple-wants-to-make-25-of-its-products-in-india-minister-claims-backing-up-analysts-projections/