Apple's Assembled-In-India Dream Almost Reality

This past Thursday, Karnataka IT minister, Priyank Kharge stated that Apple would start churning out iPhones that were assembled locally in Bengaluru, India, according to an article on Livemint.

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“In less than a month, we will have something out - Apple will start assembling and making its high-end iPhones at its plant in the city. Taiwanese based Wistron Corp (one of Apple's major OEMs) will help Apple in doing so,” he said.

By assembling phones in India, Apple can more than likely reduce its cost by 16% which is the amount of duty the company pays on an imported unit that is fully assembled/manufactured outside of India. That 16% cost savings can then be passed (fully or partially) on to the consumer which can help Apple increase its market share in the fastest growing smartphone market in the world.

“Assembling and making of iPhones in Bengaluru will boost Apple’s chances of gaining a foothold in the fast growing Indian market because it will allow the company to lower prices,” Kharge said.

Apple has also asked the Indian government to grant it special tax breaks and subsidies in order to also start manufacturing the iPhone in India, further reducing costs going forward. At the moment, it seems the Indian government is focused on the implementation and roll-out of the GST (good and services tax) which will further set up a nationwide uniform system of taxation versus the current mix of various local central and state taxes. Once the GST is rolled out, Apple could see its requests on a fast track for review by government officials.

“The government should give companies a timeline, say in 10 years they should be able to manufacture 100 per cent of phones and its components by procuring them from the local market. Such a timeline should be given because we don’t have that environment now.” The government should also give companies subsidies and incentives to create a level-playing field for them to strengthen the Indian eco-system,” Kharge said.

To read more, please visit: https://www.forbes.com/sites/jaysomaney/2017/04/02/apples-as...