Monday 29 / April / 2024
New Delhi: Apple now makes as much as 14 percent or about 1 in 7 of its devices from its facilities in India. Taiwan-headquartered Foxconn assembled nearly 67 percent while Taiwanese tech firm Pegatron Corp made about 17 percent of the India-made iPhones.
The remaining iPhone units were manufactured by Wistron Corp's Karnataka plant which the Tata Group took over last year. Amid geopolitical tensions between Beijing and Washington, Apple is increasingly looking to diversify its supply chain beyond China, which still remains the largest iPhone-making hub in the world. Apple's move to open its two famed retail stores in India's Mumbai and Delhi and its plan to inaugurate the third one in 2025 indicate the Indian market is a high priority for the tech firm.
The tech giant’s potential shift from China to India in terms of manufacturing and supply chain operations is a major development that has gained global attention. This potential shift is a significant move with far-reaching implications, not only for India and China but also for the global tech sector and international trade dynamics. Apple's production line in China has been active since 2001 and the company's move away from the country is a big deal for several compelling reasons.
Besides representing a major milestone in the ongoing transformation of global supply chains, this shift also highlights broader economic and geopolitical shifts. According to experts, China and India are both giants in the Asian region and economic rise in one country often translates into economic decline in the other. So, this zero-sum relation between India and China predicts this shift would have long term consequences in the relationship between the two countries.
Besides producing and assembling Apple's products, China also serves as a big market for iPhone and other Apple products. Apple’s efforts to move its assembly lines from China became more urgent in the last five years as trade tensions between Washington and Beijing intensified, and due to supply chain disruptions Apple had to scale back production in China. Apple is planning to shift from China for multiple reasons. One of them is a drop in sales. Investment firm JP Morgan reported that Apple's iPhone sales are declining at an accelerating rate in China.
However, the firm hopes that Apple's services, such as Apple TV+ and iCloud, may balance out the decline. Another major reason is India's manufacturing capacity as Apple CEO Tim Cook once said, “India is moving very fast in the right direction. They’re reforming the tax code, the duty structures, and we’re pretty convinced that it is a great place to make things.” India's growing market with an increasing consumer base, cheap labour, low production cost, and risk mitigation are other important reasons behind the move.
According to experts, Apple's production and assembly shift would make some major impacts for India as well as for China. After the relocation, Apple will be able to produce iPhone and other products at a lower cost for which consumers will get cost-effective Apple products. This shift will allow Apple to diversify its supply chain, reducing vulnerability to disruptions, like trade tensions or natural disasters. Aligned with the Indian government’s “Make in India” initiative, Apple’s shift to India will boost job opportunities and contribute to the country’s economy.
On the other hand, Apple's shift from China may result in the loss of jobs, revenue and economic activity in the regions, which are heavily dependent on Apple's operations, as the US tech firm has been a major contributor to China’s economy. Experts said this shift could disrupt the country's manufacturing and supply chain ecosystem, while this relocation would volume up China's ongoing trade and economic competition with India and the West. Apple's production and assembly outside of China could prompt a broader reshaping of global manufacturing hubs, where countries like India, Vietnam, and Mexico may gain prominence as attractive alternatives for Apple's product manufacturing, leading to increased competition among nations to attract multinational companies.
