As Apple opens its first India store, the manufacturing sectors are provided with lots of opportunities. Apple is focusing on obtaining two key components for its iPhone by working with local suppliers in India. Apple is working with Tata for the iPhone casing, and the camera module will be produced by a Chinese manufacturing company, Sunny Opotech. According to vendor data, approximately 12–15 per cent of the domestic value addition of iPhone components is obtained from its three vendors: Foxconn, Pegatron, and Wistron. Once these are manufactured from Indian plants, the domestic value addition will reach 27–30 per cent. Domestic value addition could be said to be the difference between gross output at basic prices and intermediate consumption at the purchaser's price. By the financial year 2026, the government expects all the players in the market to reach 40 per cent under the production-linked incentive (PLI). Production-linked incentives are a scheme that focuses on boosting domestic manufacturing, investments, and exports of telecom and networking products. Sunny Opotech said it is investing $300 million to manufacture iPhone camera modules.
About 14 Chinese companies have obtained initial clearance to set up a joint venture in India from the Ministry of Electronics and Information Technology, given that they have applied to the government under the Foreign Direct Investment Policy. Tata and Apple have been working together in the manufacturing of the iPhone's mechanical parts at Tata's Hosur plant in Tamil Nadu. Tata is said to be the first Indian firm that is part of Apple's supply chain.
The government focuses on a target of 40 per cent, which is more or less at the same level as China. Some models had already reached that level, and some have reached 50 per cent. The domestic value addition of Vietnam stands at around 30 per cent.
According to the estimates of the Indian Cellular and Electronics Association (ICEA), mobile phone exports will reach $11 billion in the financial year 2023, which is double the figure of the previous year. During 2023, component imports stood at around $30 billion. The total production of phones for exports as well as domestic use came to $44 billion. In the case of Apple, the total value of phones assembled in India for exports as well as domestic sales stood around Rs 60000 crore, of which Rs 40000 crore was from exports. It is noted that the strategies opted for by India in its quest for growth in mobile device assembly were different from those of China and Vietnam. India chose to increase domestic value addition (DVA) when the scale of production was low. After the exit of Nokia from the country, the scale only declined further. Whereas in China, growth came from scale and later from DVA. It is recommended to also focus on the scale rather than DVA in the case of India. Component manufacturing may bring up employment opportunities, and increased localization would result in the growth of the manufacturing sector.
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