Apple to move one-fifth production out from China to India soon

Editor's Pick Apple to move one-fifth production out from China to India soon
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Apple is in talks with Indian authorities to move a part of its production from China to India. This was reported by Economic Times as the Cupertino based firm would eventually apply to India’s new PLI scheme, and make a smartphone production of $40 billion in the next five years.

After enough trade-war tensions between US and China, and Trump ordering his domestic companies to cut off from Chinese players, American companies are looking for other nations with extensive human labor for productions. And one from that is the trillion-dollar technology giant, Apple.

As reports stated, India has talked to smartphone companies like Apple, Samsung and homegrown Lava to set up manufacturing hubs in India, and push exports. And to encourage them in enrolling into this, the Indian government has crafted a new regulation called PLI scheme (Production-Linked Incentive), where the manufacturing firms can get slashes in many duties and taxes.

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As the tensions between the US and China are heating up, it’s fair that Apple is planning to move out. And the company would assign its contract manufacturers like Wistron and Foxconn to start production when formalities are done. As officials said, the said regulation will be going live by August 1st, and expect companies like Apple, Samsung, Lava and Chinese players like Oppo and Vivo to enrol.

The manufactured devices would mostly be exported, helping India’s economy to be boosted. But, there are few hurdles in doing this process like assessing the value of its plants in China and the extent of information needed will make things more uneasy. The scheme would also ensure the companies are reaching the manufacturing threshold of at least $10 billion a year and reaching $40 billion by the subsequent five years.

Apple’s bet on India is sensitive, as there will be more products to be exported. The manufacturing to consumption ratio of iPhones in India is far less than China’s numbers. As there are around just $500 million worth of phones being produced in India and $1.5 billion is sold for the domestic market. Whereas in China, they produce over $220 billion worth stock and $185 billion worth stock was exported. And it’s interesting to know how numbers could turn with this new decision.

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