Until then, the iPhone ese had been made in China. It is of great significance for apple to increase its shipments in India to produce cheap iphonese in 2020. In fact, it has long been rumored that Apple will transfer part of its production capacity from Chinas industrial chain to India, and all sectors of India also continue to call for the transfer of industrial chain from China. But before that, even when Chinas supply chain was hit by the new crown epidemic, apple continued to add more weight to China. If the news of iPhone eses production in India in 2020 is true, it may mean that this time wolf is really coming.
Apple supply chain transfer?
In recent years, due to the rising labor costs in China and trade frictions between China and the United States, the news that part of Apples industrial chain moved 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.
Made in India
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.
Its not easy to move Apples supply chain to India. India lacks supply chain and infrastructure. Even with a large number of cheap labor, roads, railways, water supply facilities and a complete supply chain cannot be built in two days.
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.
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