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In a strategic shift towards diversifying its manufacturing base, Apple Inc. has been intensifying its production capabilities in India. This move is seen as part of the tech giant’s broader strategy to reduce its dependence on China, amid escalating US-China trade tensions and the ongoing quest for supply chain resilience. Historically, the majority of Apple’s products, especially the iPhone, have been assembled in China. However, the company has been progressively ramping up its production capacity in India, targeting to manufacture approximately 25% of its global iPhones in the country over the next few years.
The decision to expand manufacturing in India is not without its challenges and controversies. Recently, Donald Trump expressed his dissatisfaction with Apple’s plans to increase product manufacturing in India, citing a preference for the company to build its products in the United States. Trump’s comments underscore a broader debate about the location of tech manufacturing jobs and the global nature of the electronics supply chain. Despite this political pushback, Apple’s commitment to India reflects a strategic calculation, taking into account factors such as labor costs, the skilled workforce, and the burgeoning market within India itself.
India offers a compelling mix of advantages for Apple, not least of which is the potential to tap into one of the world’s largest smartphone markets. In addition to market access, the Indian government’s Make in India initiative, which aims to boost the country’s manufacturing sector, has been an attractive policy environment for foreign companies like Apple. Initiatives such as Production Linked Incentive (PLI) schemes have further incentivized Apple’s decision, offering financial benefits for increasing local production. This move also aligns with Apple’s efforts to mitigate risks associated with over-concentration of its production in any single country, particularly in the wake of disruptions experienced due to the COVID-19 pandemic.
Moreover, Apple’s expanding manufacturing footprint in India is expected to have significant economic implications for both the company and the country. For Apple, it presents an opportunity to diversify its supply chain and potentially reduce costs, which could enhance its competitiveness in global markets. For India, it signifies a boost in local employment, development of ancillary industries, and an overall strengthening of its position in the global manufacturing landscape. As Apple continues to scale up its Indian operations, the move is widely regarded as a win-win for the tech giant and the Indian economy, despite the political frictions it may occasionally spark.
