In recent years, due to the rising labor costs in China and trade frictions between China and the United States, the news of part of Apples industrial chain moving to India is frequent. As early as April last year, Bloomberg reported that Terry Gou, chairman of Hon Hai group, said Foxconn would mass produce iPhones in India, which would mainly serve Indias domestic and export markets. In less than a year, however, Foxconns plans to set up a new plant in India came to an end. In January, Subhash Desai, Minister of industry of Maharashtra, India, said plans to work with Foxconn to build a local electronics manufacturing plant had been cancelled.
In March this year, the new crown epidemic hit Chinas manufacturing industry. It is reported that many Apples Chinese production partners are considering building factories abroad, and India, Vietnam and Mexico are all their destinations. For example, Wistron plans to adjust its production in India, Vietnam and Mexico, allocating $1 billion for expansion this year and next; another iPhone assembler, Heshuo, says it wants to set up a new factory in Indonesia and start manufacturing in Vietnam by 2021; yingyida, the main assembler of airpods, says it plans to open a production line in Vietnam.
On May 11, the economic times of India reported that apple is studying to transfer about one fifth of its existing manufacturing capacity in China to India and expand its supply chain capacity in India to US $40 billion in the next five years.
In order to attract foreign capital to set up factories in order to build the local industrial chain, in recent years, the Indian government has introduced relevant policies. On the one hand, the import tariff has been raised year by year, forcing mobile phone manufacturers to build local factories. In February this year, India again raised import tariffs on electronic products and other goods, among which the tariff on imported smartphones rose to 20%.
On the other hand, we will introduce incentive policies. In April this year, the Ministry of electronics and information technology of India announced that it would launch a production related incentive plan totaling rs. 480 billion to promote the development of the local electronic manufacturing industry. From August this year, the Indian government will give 4% to 6% reward for incremental sales of mobile phones and designated electronic components, such as printed circuit boards, photosensitive polymer films and components. Mobile phone manufacturers with a total investment of more than 10 billion rupees in four years can get an additional 6% reward in the first two years, 5% in the next two years, and 4% in the fifth year.
Just in early June this year, the Indian government just announced that it will provide financial incentives and supporting facilities worth about 500 billion rupees (about 6.6 billion US dollars) to attract global smartphone and related parts manufacturers to invest in India. The Indian government will initially target five global suppliers and extend fiscal incentives for five years, the Ministry of electronics and information technology said.
Indias roads, ports and infrastructure are far behind Chinas, a Foxconn executive told the Wall Street Journal. The supply chain is not in place and Indian workers are not ready to produce high-end OLED models. Lin Xianming, chairman of Weichuang, also admitted that Weichuang has been deployed in India, but there must be difficulties, including human resources, language communication and government execution.
However, at present, it seems that although there are many difficulties, Apples efforts to decentralize the industrial chain are already underway.