Apple iPhone exports from India set to double in a year in boost for PM Modi’s plan

Apple Inc.’s iPhone exports from India topped $1 billion in the five months since April, according to people familiar with the matter, signaling the South Asian nation is making progress in its bid to become an electronics manufacturing force will.

At the current rate, outbound shipments of Indian-made iPhones, mostly to Europe and the Middle East, are expected to reach $2.5 billion in the 12 months to March 2023, the people said. That’s nearly double the $1.3 billion worth of iPhones India exported in the year to March 2022, the people said, asking not to be named as the data isn’t public.

While India accounts for only a small fraction of iPhone production, rising exports bode well for Prime Minister Narendra Modi’s plan to make the country an alternative to China as a factory for the world. Apple, which has long made most of its iPhones in China, is looking at alternatives as Xi Jinping’s government clashes with the US government and imposed lockdowns across the country that have disrupted economic activity.

“The healthy growth in Apple’s manufacturing scale and exports shows that India is beginning to play a key role in the company’s China-plus-One strategy,” said Navkendar Singh, an analyst at technology researcher IDC. “And for India, this is a big sign of the success of its financial stimulus program.”

Apple officials did not immediately respond to an email requesting comment. The Cupertino, California-based company toyed with the idea of ​​making its prized iPhones in India for years before Modi’s $6 billion incentive push in 2020 prompted the US tech giant to get its suppliers to start production to boot.

Apple’s main Taiwanese contract manufacturers Foxconn Technology Group, Wistron Corp. and Pegatron Corp. are currently making iPhones in factories in southern India. All three received manufacturing incentives under a federal government plan.

India is still far behind China. About 3 million iPhones were made in India last year, compared to 230 million in China, according to Bloomberg Intelligence estimates.

The devices to be exported from India from April to August this year include iPhone 11, 12 and 13 models, and exports of the new 14 series will start soon, the people said. Apple began manufacturing the iPhone 14 in India last month – earlier than expected – after a surprisingly smooth production launch that cut the lag between Chinese and Indian production from months to just weeks.

Beyond smartphones, India is drafting plans to increase financial incentives for tablet and laptop makers, hoping to persuade Apple to make MacBooks and iPads locally and attract other brands.

But the road out of China, where Apple has built a deep supply chain for nearly two decades, isn’t easy. An analysis by Bloomberg Intelligence estimates that it would take about eight years to move just 10% of Apple’s manufacturing capacity out of China, where about 98% of the company’s iPhones are made.

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