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Why is iPhone manufacturing shifting away from China towards India?
Why is iPhone manufacturing shifting away from China towards India?
Bank of America is forecasting that 18% of global iPhone manufacturing will be moved to India by 2025 based on targets from Apple’s contract manufacturers like Foxconn.
India is offering a productive-linked incentive scheme for smartphones to attract electronics manufacturing to the country. India has made rapid advances in the last five years in electronics manufacturing.
While labor is cheaper in India, that is not the whole story here. It is about having an alternative supply versus China given the high tensions right now. The reason there is so much electronics manufacturing in China is because of a city called Shenzhen. There are supply chain advantages there that cannot be found anywhere else. You have an entire city that specializes in electronics manufacturing with thousands of companies located in one geographic area. There are these massive marketplaces with hundreds of vendors that allow you to purchase small samples of components or have something custom made.
Apple is seeking to diversify its supply chain away from China for business continuity reasons. India is the logical second choice after China.
Another reason is the new international minimum corporation tax deal incentives companies to have factories and offices in countries where they are making profits so they can offset taxes. You see this with US companies increasing headcount in Europe.
Works Cited:
https://www.thehindubusinessline.com/info-tech/mobiles-tablets/apple-to-shift-18-per-cent-of-global-iphone-production-to-india-by-fy25-report/article66967446.ece
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