Apple reportedly approached Foxconn, its main supplier and the largest electronics contract manufacturer in the world, about producing iPhones in India within the next two to three years.
According to Economic Times, Indian Prime Minister Narendra Modi raised the issue of local production of iPhones with Apple CEO Tim Cook when they met in May, and now Apple is looking into the possibility in the longer term.
A number of news sources reported in May that Foxconn had neared a deal with the Indian government to set up a $10 billion facility to produce Apple devices.
The first step would be to start assembling iPhones in India, a source said, but no timeframe has been discussed.
Complicating a move to local production is the country’s local sourcing rules, which require foreign firms with single-brand retail outlets to source 30 per cent of the sales value of the components from India within five years of starting operations.
In June the government reversed its decision the previous month not to ease local sourcing rules for Apple and granted the iPhone maker a three-year waiver on the requirement, which clears the way for it to open Apple Stores in the country. The reversal is part a major reforms package of the country’s foreign direct investment policies announced by the head of the country’s central bank.
Apple is looking to India for growth as sales have slowed in other markets, particularly China, its second largest market. India is the third largest smartphone market in the world and one of the fastest growing. Smartphone shipments in India expanded 15 per cent year-on-year in Q2, as global growth slowed, according to Counterpoint.
Shortly after Cook’s visit, Apple announced plans to open a new facility in Hyderabad to work on its Maps products and establish a design and development accelerator in Bengaluru, described as “the home of India’s startup scene”, to support engineering talent and accelerate growth in the country’s iOS developer community.