Apple to start making iPhones in India, in the next two months: WSJ report

It looks like Apple is unfazed by the recent denial of the Indian government to agree to all of its demands. According to a report in the Wall Street Journal, Apple is all set to start assembling its iPhones via its contract manufacturer Wistron Corp, in the next two months. WSJ came to know about this move thanks to government sources familiar with the matter.

Taiwanese company Wistron Corp, Apple’s contract manufacturer, has already setup a unit in Bengaluru in Karnataka. It will most likely be making iPhone 6 and iPhone 6s models at this plant in a four-to-six week time-frame according to an official from Karnataka. The iPhone SE will also be added to the assembly line in about a three month time-frame.

According to the report, the officials say that all the preparations are ready at the Bengaluru plant of Wistron. An Apple spokeswoman also mentioned that Apple has been working hard to develop its operations in India and that the company was happy with the constructive and open dialogue with the government pertaining to expanding local operations.

According to a senior federal government official at the Trade Ministry, Apple also has plans to bring some of its component manufacturers to India to help with making some parts and export finished products.

(Also Read: Apple iPhone to be made in Bengaluru: Will boost the component-manufacturing ecosystem in India)

Apple has been trying hard to setup its operations in India, but it also has some demands which may seem unfair to scores of other smartphone makers who are assembling their phones in India.

In a communication to the government, the Cupertino-based technology major had asked for incentives from the Department of Revenue and Department of Electronics and Information Technology (DeITy). Besides exemption from the Customs duty on imports of components and equipment for 15 years, Apple wanted relaxation in the mandated 30 percent local sourcing of components.

Apple had earlier indicated to the government that it is ready with a blueprint to begin manufacturing iPhones in India, but wanted fiscal concessions, including customs duty waiver on import of components. Apple executives had made a detailed presentation to an inter-ministerial group headed by Department of Industrial Policy and Promotion Secretary Ramesh Abhishek on its road map for setting up a manufacturing unit in India.

However, the Department of Revenue has said no to the tax incentive demand of US-based iPhone maker Apple, which wants to set up a manufacturing unit in the country.

Assembling phones in India should cut down close to $100 (approx Rs 6500) as the import tariff will come down, according to analyst firm CMR.

Apple has a less than 5 percent market share in India, whereas its rival Samsung is a leader with over 20 percent market share. Apple’s price points for iPhones start at around Rs 22,000 with the iPhone SE whereas the majority of the phones that sell in India cost below Rs 10,000. Considering Apple managed to register an 18 percent growth in India, as compared to 3 percent globally, according to Counterpoint Research, it is clear that India is an important market for Apple. Tim Cook has said so in no uncertain terms.

According to the report, Tim Cook in a call with investors, also expressed the desire to open retail stores in India. According to Cook, Apple also plans to invest significantly in India.

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