Cheng Uei Precision Industry Co, a Taiwan-based cable and connector maker, will start mass production for Apple Inc. later this year from its new plant in India, according to a report by Bloomberg. Foxconn Technology Group, Pegatron Corp. and Wistron Corp, Apple’s major assembly partners have set up either a subsidiary or an iPhone assembly plant in India. They plan to invest a total of almost $900 million in India in the next five years to tap into a new production-linked incentive plan, according to a report by Reuters.
India’s new ₹665 crores production-linked incentive (PLI) scheme offers companies cash incentives on any increase in sales of locally-made smartphones over the next five years, compared with 2019-20 levels. The scheme aims to help transform India into an export manufacturing hub.
Foxconn has applied to invest about ₹4,000 crores, while Wistron and Pegatron have committed to invest close to ₹1300 crore and ₹1200 crore, respectively, under the PLI plan, according to reports.
While Foxconn, Pegatron and Wistron make devices for companies other than Apple globally, Wistron’s arm in India currently assembles only iPhones. Wistron, which assembles roughly 200,000 second-generation iPhone SEs per month in India, plans to scale that up to 400,000 a month by the end of the year, one of the sources said, as it looks to cater to export demand for the device.
That plan is expected to create roughly 10,000 jobs, the source added.
India is trying to attract manufacturing for Apple, Samsung Electronics Co. and other major smartphone brands with an incentive programme, as political tensions between the U.S. and China escalate. The global coronavirus pandemic has added pressure on companies to review supply chains.
Apple started assembling in 2017 a low-cost iPhone model in India through Wistron’s local unit in the tech hub of Bengaluru. It later ramped up production, with Foxconn beginning to assemble iPhones last year and Wistron widening operations.
“India is key to Apple’s global ambitions as it expands beyond China,” Tarun Pathak, an associate director at tech researcher Counterpoint told Reuters. “It offers a strategic market to them where skilled labour is cheaper as compared to other manufacturing destinations, the size of the internal market is huge and the export potential is enormous,” he added.