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Apple will make phones, components in India for export: IT minister Prasad

Premium phone maker Apple has started making mobile phones and components in India for export and is on board as far as the India success story is concerned, Union minister for Electronics and Information Technology Ravi Shanker Prasad said on Monday.

Prasad was addressing reporters after deliberations with 34 CEOs of smartphone and consumer electronics companies in a day-long meeting here where Apple, Samsung, Xiaomi, OPPO, and other top corporates were present.

“Apple has started manufacturing phones in India, including components. I am making this announcement publically that now they have come to India, they have started making phones for export. They have also started making components for export. This is just the tip of the iceberg. I want a robust presence of Apple in India,” Prasad said.

At present, iPhone SE, iPhone 6S and iPhone 7 models are assembled at a facility in Bengaluru through contract manufacturer Wistron for the California-based phone maker.

Apple did not respond to an email query seeking details of its current and future manufacturing and export plans. The company has 1.6% market share in India where Chinese smartphone companies like Xiaomi, OPPO and Vivo dominate sales.

The government’s statement also comes two weeks after it relaxed norms that earlier required companies to source 30% of their production locally to now include exports as part of the requirement. It has now also allowed foreign single brand retailers to set up online stores before physical shops provided the brick-and-mortar stores come up in two years from the date it starts selling through its online stores.

The new rules mean that in the near term India could be home to Apple’s iconic physical stores, which are immensely popular in the West, and where consumers also often end up exploring its other product and services portfolio.

This also comes at a time when Apple is looking to slowly shift manufacturing facility away from China given the trade tensions between US and China. The phonemaker has asked its major suppliers to evaluate the cost implications of shifting 15% to 30% of their production capacity from China to Southeast Asia as it prepares for a fundamental restructuring of its supply chain, the Nikkei Asian Review reported in June.

Meanwhile, the Indian government wants to attract companies here and make the country a manufacturing and exports hub for mobile phones and consumer electronics. A detailed policy with sops to boost this is expected to be out in 2-3 months.

“The real moment has come for India to manufacture for the world,” Prasad said.

The government has set a target of electronics production of $400 billion by 2025. In 2018-19, it was $70 billion. It will now set up a task force to create the roadmap to make sure companies have a favourable working environment.

“India offers a huge market. It will offer you friendly policies, incentives. We are also open if you (companies) have a facility just for exports also,” Prasad said.

In 2014, there were two mobile phones and accessories manufacturing units and India assembled 6 crore mobile phones. This has increased to 268 such manufacturing units and 29 crore mobile phones assembled here in 2018. Mobile parts are imported and phones are assembled here.

“We need to aim for greater import substitution and also open up exports from India. Mobile phones segment will be a major area for boosting exports from India…Within few months, we plan to bring a comprehensive package with sops for electronics manufacturing,” Ajay Prakash Sawhney, Secretary, Ministry of Electronics and Information Technology had told reporters on Friday.

“The idea is to attract and anchor company along with its supply chain which would create a larger electronics manufacturing cluster,” he had said.

Source: Livemint