Apple exported $1 billion worth of iPhones in the last five months, data showed, underscoring the leap India has made in the electronics manufacturing segment.
India is a late entrant in the sector, which has been dominated by China and Taiwan. The Indian government, in recent years, has been promoting the 'Make in India' campaign aimed at grabbing a significant share of the Asian hi-tech manufacturing jobs.
The outlook for India manufacture of Apple iPhones is quite robust according to Bloomberg data. The report says iPhone shipments from India to Europe and the Middle East is slated to hit a mammoth $2.5 billion in the 12 months through March 2023.
"The healthy growth in Apple's manufacturing scale and export shows India is gradually assuming an important position in the company's China plus one strategy ... And for India, this a big sign of the success of its financial incentives scheme," said Navkendar Singh, an analyst at tech researcher IDC.
Apple started making iPhones in India in 2017 in a limited way, with the manufacture of iPhone SE. However, Prime Minister Narendra Modi's government announced huge incentives in the years that followed, which drove Apple's Taiwanese contract manufacturers explore the India option further.
Now, Apple's contract manufacturers Foxconn Technology Group, Wistron Corp. and Pegatron Corp make various models of iPhones in their India plants. At the moment, India only makes around 3 million iPhones whereas China makes a whopping 230 million units.
In a big push to its India manufacturing plans, Apple started making the latest iPhone 14 in India in September.
"We are excited to be manufacturing iPhone 14 in India," Apple said in a statement.
"The new iPhone 14 lineup introduces groundbreaking new technologies and important safety capabilities," the company said.
As Apple makes 98 percent of its iPhones in China, a total shift of manufacturing away from China is not a possibility. However, the pace at which the Indian capacity is increasing signals India's ambition to become a tech manufacturing powerhouse.
According to a projection by JP Morgan analysts, Apple could end up making one out of four iPhones in India by 2025. In its 'Apple Supply Chain relocation' report, JP Morgan predicted that Apple "is likely to move about 5 per cent of iPhone 14 production to India from late 2022 and reach 25 per cent by 2025".
Revenue Hot Spot
While India has been more welcoming to the tech industry and is rolling out incentives to manufacturers under PM Modi's local manufacturing push, another reason why tech companies are flocking to India is the changing political and social conditions in China.
"US-China trade tensions kicked off the production relocation cycle and the search for a 'China+1' manufacturing approach for the Apple supply chain from late 2018," the JPMorgan report had said.
Apple also notes that India is also emerging as a new revenue hot spot for the company. "We set June quarter records in the Americas, in Europe and the rest of the Asia Pacific region. We also saw June quarter revenue records in both developed and emerging markets, with very strong double-digit growth in Brazil, Indonesia and Vietnam and a near doubling of revenue in India," Apple CEO Tim Cook said earlier this year.