Apple is the shining star in India’s Make in India initiative

In a “Make in India” success story, Apple Inc has assembled iPhones with a freight-on-board (FOB) value of more than Rs 60,000 crore in the first seven months of 2023-24 (FY24) through its three vendors in the country.

This accounts for 81 per cent of their combined target of Rs 74,000 crore, which they were required to achieve in FY24 under the production-linked incentive (PLI) scheme for mobile devices. Seventy per cent of this is from exports of iPhones from India.

The numbers are based on data provided by the three vendors — Foxconn, Pegatron, and Wistron (now acquired by Tatas) — to the Centre and the state governments.

FOB value includes ex-factory plus other costs like transportation, warehouse, etc. to deliver to the seller. An Apple Inc spokesperson did not respond to queries on the issue.

According to their current run rate, the three vendors are expected to hit an FOB value of Rs 90,000 crore to Rs 1 trillion of iPhones production by the end of FY24, which will be 20 to 35 per cent higher than what they have committed under the PLI scheme.

If achieved, iPhone’s three vendors will easily surpass the FOB value target for FY25, pegged at Rs 92,526 crore. The target in the fifth year is to reach Rs 1.09 trillion, helping Apple accelerate its ambition to shift 18-20 per cent of its iPhone production to India by FY26.

The FOB value achieved by the three vendors in the first seven months of FY24 is nearly equivalent to what Apple Inc achieved in the entire FY23, which was an FOB value of Rs 62,000 crore.

The Cupertino-headquartered company surpassed its commitment under the scheme even in the second year of operations when it had committed to producing iPhones with an FOB value of Rs 47,000 crore. However, the three vendors surpassed that number and achieved Rs 62,000 crore.

The big jump in the FOB value of iPhone production this year has been kicked off by a spike in iPhone exports from the country. Exports touched $5 billion (Rs 41,700 crore) in the first seven months of FY24, a 177 per cent year-on-year growth. Last year, iPhone exports from India over the same period were a mere $1.8 billion.

As a result, Apple’s contribution to the overall exports of mobile devices from India has gone up from 45 per cent in FY23 (when it did $5 billion in the entire year) to 62.5 per cent in the first seven months of FY24.

The encouraging trend has spurred the government to announce ambitious targets for mobile device production. Communications Minister Ashwani Vaishnaw recently announced that by the end of FY24, India’s mobile device exports would touch $15 billion while their total production in the country would hit a value of $50 billion. Business Standard