After months of back and forth, Apple may finally begin to assemble iPhones in India in the coming two months. While Apple has had a strong hold on the industry worldwide, given the exorbitant price tags, Indian market has still been a little reluctant. However, the move to make iPhones locally will boost the company’s chances of gaining a foothold in India’s fast-growing market.
“Almost all preparations have been done for launching Apple’s first phase project in Bangalore through Wistron,” an official of the southern state of Karnataka told WSJ. According to the publication, Taiwanese contract manufacturer Wistron Corporation will likely start making iPhone 6 and iPhone 6s models here in the next four-to-six weeks at its plant in Bengaluru. And eventually, in a period of about three months, it will also add Apple’s cheapest offering, the iPhone SE to the the assembly line.
“We’ve been working hard to develop our operations in India,” an Apple spokeswoman said. “We appreciate the constructive and open dialogue we’ve had with government about further expanding our local operations.” A Wistron spokesman said the company doesn’t comment on “rumor or speculation.” ALSO READ: Apple iPhone 6s named as the bestselling smartphone in 2016: IHS Markit
Last year, Apple saw a dramatic decline in sales in China, and in a recent interview OPPO and Vivo founder Duan Yongping blamed the same on Apple’s stubbornness around product pricing. However, the local assembly project is likely to help Apple with the same issue in India. At present a 16GB iPhone SE costs about Rs 25,000 in India, which is still out of budget for many in the country. However, according to Faisal Kawoosa, an analyst at research firm CMR, making the phones in India would allow Apple to lower prices by at least $100, which is a little more than Rs 6,000, as its import tariff bill comes down. ALSO READ: Apple iPhone SE at Rs 19,999: Where exactly did Apple go wrong?
Additionally, Apple has also been in discussions with the central government now, to also begin the next level of production in India. Apple wants to bring its component manufacturers to India to make parts and export finished phones. Apple has sought concessions, including duty exemption on manufacturing and repair units, components, capital equipment. It also sought relaxations for consumables for smartphone manufacturing and service or repair for 15 years as it plans to set up a manufacturing unit in India. RELATED: Apple executives meet finance ministry officials over duty concession demands
In a communication to the government, Applle has asked for incentives from the Department of Revenue and Department of Electronics and Information Technology (DeITy). Apple also wants relaxation in the mandated 30 percent local sourcing of components. However, the government is yet to accept any of these demands. In fact, the Ministry of Electronics and IT has found that it ‘may not be feasible’ to grant Apple the exemptions that it is demanding. ALSO READ: Government hasn’t accepted most of Apple’s demands: Nirmala Sitharam