Over the past two years, India has witnessed a remarkable surge in Apple iPhone production. From a few thousand units, production has skyrocketed to millions. This rapid expansion underscores the Cupertino giant’s growing commitment to the Indian market. Last year alone, Apple’s iPhone production in India surpassed an impressive ₹1 lakh crore mark. Of this substantial output, ₹65,000 crore worth of made-in-India iPhones were exported to international markets between January and December.
What’s more noteworthy is that Apple’s production achievements in 2023 have outpaced the benchmarks established by the production-linked incentive (PLI) program. Consequently, the company’s contract manufacturers are poised to reap incentives based on their performance, thereby amplifying the economic benefits for the Indian manufacturing sector.
Delving deeper into the production dynamics, an official clarified that the ₹1 lakh crore figure represents the Freight on Board (FOB) value at which the devices leave the factory. When considering taxes and dealer margins across various countries, the cumulative market value of these made-in-India iPhones could range between ₹1.5 lakh crore and ₹1.7 lakh crore. It’s important to note that the production-linked incentive is determined based on the FOB value of each device.
Apple’s Growth in India
The substantial growth in iPhone production and exports from India underscores a noteworthy achievement for both Apple and the Indian government. The tech giant’s intensified commitment to positioning India as a central hub for iPhones resonates with the government’s proactive efforts to shift supply chains away from China, a strategy that gained momentum, especially in the wake of the COVID-19 pandemic.
Interestingly, amid this evolving landscape, Apple’s market share has soared from a mere 2% in FY18 to a notable 6% in FY23. In contrast, rival Samsung’s market share has dipped from 26% to 20% during the same timeframe.
Financially speaking, Apple’s impressive revenue growth in India – from Rs 13,097 crore in FY18 to Rs 49,322 crore in FY23 – further cements its dominant position as the largest smartphone manufacturer in India by value. In contrast, Samsung’s mobile revenues have also swelled, though at a slower pace, rising from Rs 37,349 crore to Rs 70,292 crore during the same period.
Apple’s Strategic Partnerships
To bolster its manufacturing shift from China to India, Apple is fostering collaborations with Indian suppliers, including a unit of the Tata Group.
Apple has strategically partnered with three prominent contract manufacturers: Foxconn, Pegatron, and Wistron. Their remarkable surge in producing made-in-India iPhones positions them favourably to reap the benefits of the government’s Production-Linked Incentive (PLI) scheme.
Foxconn emerges as the dominant force in iPhone manufacturing in India, commanding a robust 68% share of the total production. Pegatron and Wistron trail behind, contributing 18% and 14% to the production landscape, respectively. This collaborative effort has resulted in the assembly and export of a diverse range of iPhones from India, encompassing models from the iPhone 11 through the latest additions in the series, such as the iPhone 15.
Continuing the trend, Foxconn spearheaded iPhone exports from India, accounting for 58% of its overall production, with the remaining 42% catering to the domestic market. Pegatron and Wistron are even more export-oriented, with 80% and 96% of their iPhone production being exported, respectively. Impressively, approximately 65% of iPhones manufactured in India find their way to consumers across the US, Europe, and West Asia.
In a testament to its global appeal, Apple became the first brand to exceed US$ 4.85 billion (Rs 40,000 crore) in mobile phone exports from India in FY23. Fueled predominantly by iPhone sales, this remarkable feat contributed to India’s overall mobile phone exports reaching a noteworthy US$ 10.92 billion (Rs 90,000 crore) in the same fiscal year. As per data from the commerce ministry, the robust performance of mobile phones has propelled the electronics sector to emerge as India’s fifth-largest export category within just the initial eight months of the current fiscal year.
