Production of iPhones in India could become more economical for Apple.

The production of iPhone in India is a key element of Apple's efforts to reduce dependency on Chinese production, and a new report indicates that the company may be able to reduce costs associated with this.

The Indian government is reportedly planning to provide at least $27 billion in support for local production, which could reduce the production costs of iPhones in the country...

Apple's Increase in iPhone Production in India

The need for Apple to reduce its dependency on China as a production center has been evident for many years, and the pandemic has highlighted the risks of concentrating 80% of global iPhone production in a single factory.

Apple has always aimed at India as its primary second production center. We have heard ambitious reports for a long time – that half of all iPhones could be produced in India by 2027 – but current development is slower.

Things have significantly improved last year. Bloomberg reported in May that about one in seven iPhones are produced in India, but the production of flagship models has always had a significant delay due to advanced manufacturing processes required. This has changed with the iPhone 16, with production beginning within weeks of its launch.

New Government Support

Two ways the Indian state encourages local smartphone production are by offering tax incentives and import duties for components. Bloomberg reports that both initiatives are imminent to be intensified.

The Indian government is considering new subsidies for component manufacturers excessive to reduce import taxes on components to help stimulate local production, particularly of smartphones made by companies like Apple Inc.

The Ministry of Electronics and Information Technology has proposed giving at least 23 billion rupees ($2.7 billion) in support to component manufacturers such as batteries and camera parts, according to people familiar with the matter who requested not to be identified because discussions are private.

The ministry has also advised reducing tariffs on some electronic components, a request from industry that will help reduce production costs, said one person.

A decision is expected to be announced during the next budget review.

It seems that Apple is thinking of starting iPhone 17 production simultaneously in China and India.

Photo by Jainam Sheth on Unsplas