India is introducing a financial incentive scheme worth $2 billion to attract manufacturers of laptops, tablets, and other hardware to the country. The initiative aims to encourage companies to expand their supply chains beyond China by shifting their production to the South Asian nation, according to a new Bloomberg report.
The country is leveraging the initial success of Apple’s local iPhone assembly operations, which have contributed to around 7% of worldwide iPhone production. Apple partners reportedly plan to begin iPhone 15 production in India simultaneously with China, a first for the iPhone supply chain. Apple has added Tata Group as a new contract manufacturer to assemble the upcoming iPhones, making it the fourth Indian contract manufacturer for the tech giant. Taiwanese contract manufacturer Pegatron is said to be in ongoing discussions to open its second factory in India, also to assemble iPhones.
By capitalizing on this success, the Indian government aims to position the country as a feasible global manufacturing alternative to China as it grapples with escalating political tensions with the US. Strict lockdowns and restrictions at the height of the COVID-19 pandemic brought to a standstill supply chain operations in China, with repercussions still being felt today. The nature of the lockdowns has amplified Apple’s eagerness to expand device production beyond the Chinese border, with India being an attractive alternative. The incentive package was announced by India’s technology minister today, with the aim to run the plan for six years
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While Apple has not yet commenced the production of iPads or MacBooks in India, the introduction of new incentives may encourage the Cupertino tech giant to contemplate such endeavors, adds Bloomberg. The incentive plan comes a month after Apple CEO Tim Cook visited India to inaugurate the country’s first Apple Store locations. India’s Prime Minister Narendra Modi met with Cook, who took to Twitter to state that “we’re committed to growing and investing across the country.”
This is not India’s first attempt to attract foreign manufacturers to the country. The report adds that a similar program worth around $1 billion was initiated in 2021. The program aimed to enhance domestic manufacturing and import of laptops and tablets. However, the 2021 initiative did not succeed in attracting companies, primarily due to the perception that the incentives offered were “too small.”
