Apple’s strategic move to diversify its production base away from China continues as its key supplier, Foxconn, gears up to start manufacturing iPhones in Karnataka, India. The southern Indian state government announced that Foxconn will begin production at its Bengaluru plant by April 2024, with the land for the factory to be handed over by July 1. This ambitious project, valued at Rs. 130 billion, is expected to generate approximately 50,000 job opportunities.
Foxconn, renowned as the world’s largest contract electronics manufacturer, has set an ambitious target of producing 20 million iPhones annually at its Devanahalli plant, situated on the outskirts of Bengaluru, a major technology hub in India. This move aligns with Apple’s broader strategy of diversifying its supply chain and reducing dependence on Chinese manufacturing, especially in the wake of COVID-related disruptions and escalating tensions between China and the United States.
The decision to expand iPhone production in India not only strengthens Apple’s presence in the Indian market but also ensures a more resilient supply chain for its popular devices. By tapping into India’s skilled workforce and favorable investment climate, Apple aims to mitigate risks associated with production disruptions and explore new growth opportunities.
While Apple and Foxconn have not provided any official comments on the matter, industry insiders believe that this move aligns with the Indian government’s efforts to attract semiconductor and display manufacturing investments. Sources suggest that other players, including the Vedanta Foxconn joint venture, are likely to re-apply for government incentives under the modified semiconductor scheme, which offers increased financial incentives for setting up semiconductor fabs of any node size in India.
Under the modified scheme, the government aims to boost local semiconductor manufacturing by offering significant financial incentives, including 50 percent of the project cost, to encourage the establishment of semiconductor fabs. Additionally, similar fiscal incentives are available for setting up display fabs with specified technologies in the country.
This development highlights India’s growing importance as a manufacturing hub for global technology companies. With its large consumer market, skilled workforce, and favorable investment policies, India presents an attractive opportunity for companies seeking to diversify their production and tap into the country’s vast potential.
As Foxconn gears up to commence iPhone production in Bengaluru, Apple solidifies its manufacturing presence in India, signaling its commitment to the country’s market and its strategic vision of a diversified and robust supply chain.
