India wants to woo Apple suppliers into opening factories in the country. To that end, it may offer attractive subsidized loans to make it more appealing.
The proposals by the Ministry of Electronics and Information Technology may be part of a new federal budget for February. Alongside the subsidized loans for opening factories, it would also cover “industrial zones equipped with taxation and customs clearance.”
India wants to be making $190 billion of mobile phones by 2025. Right now it makes around $24 billion worth of handsets. Subsidized loans could help make India more attractive to suppliers.
Apple supplier Foxconn is an early success in this area. It currently operates two factories in the southern Indian states of Andhra Pradesh and Tamil Nadu. It makes devices for a number of companies, including Apple, Xiaomi, and Nokia.
Apple is reportedly preparing to increase iPhone assembly in India. Late last year, Ravi Shankar Prasad, India’s information technology minister, confirmed the move will create around 10,000 new jobs over the next five years.
Subsidized loans to win business in India
Making iPhones in India carries several potential benefits for Apple. It reduces reliance on China at a time when trade disputes with the United States have not entirely been resolved. It also allows for the local manufacture of certain iPhone models, which can then be sold more cheaply to local consumers.
Apple’s ambitions for India as a manufacturing hub got a boost last year when the government loosened restrictions on local sourcing. This helped pave the way for Apple to open its first retail store in India.
A subsidized loans scheme will make India even more attractive as part of Apple’s supply chain. We’ve only got a couple of weeks to wait — until February 1 — to find out!
Source: Bloomberg
