Apple is reportedly planning to move some of its production facilities from China to India in the coming years, to reduce the reliance on the country and diversify its supply chains.
As the global pandemic has taught us, technology companies have been overly reliant on China in recent years, and as a result, have faced issues with supply chains and distribution at a time when they needed them to work the most.
By producing as many as $40 billion of iPhones in India in the coming years through contract partners, Apple will be able to weather any future storm and indeed give the company some more flexibility in production.
According to a report in The Indian Economic Times, Apple’s senior executives have held several virtual meetings with top-ranking government officials in recent months, paving the way for a new iPhone facility in India.
The company is reportedly planning to shift as much as one-fifth of its production capacity to the country, scaling up local manufacturing efforts and working with contract partners over the next five years, according to close sources.
An Indian government official told the newspaper that the decision has been linked to the country’s production-linked incentive (PLI) scheme, which was designed to boost production in India.
As part of the scheme, a company must produce at least $10 billion worth of smartphones to benefit from the scheme, and they must meet their targets on a yearly basis.
Right now, Apple sells around $1.5 billion worth of iPhones in India, but just a third of those have been produced locally.
By moving production to India, the company can not only benefit from cheap manufacturing for its global market, but also sell tech products locally and increase its stronghold in one of the world’s most lucrative markets for smartphone brands.
Are you surprised to hear of Apple’s news? Do you think COVID-19 has spurred the country on to make a decision faster? Let us know on Twitter and check back soon for more news.
