India is all set to receive its first iPhone manufacturing plant, as Apple reportedly intends to start production of iPhones from a Bengaluru-based plant from April 2017. The iPhone 8 will allegedly be manufactured here, which will reportedly lower its price.
Apple had been in talks with the Indian government for quite some time now. CEO Tim Cook's visit to India and his subsequent meeting with the Indian Prime Minister Narendra Modi has only added fuel to the fire.
Even though the prospect of an India-manufactured iPhone seems exciting, Apple has hinted that it initially, it will start producing only a couple of gadgets and gradually increase the range.
Apple bears more than 12 percent manufacturing and production costs as import and excise duties on iPhones. With the phone being manufactured in India, these costs may be eliminated.
With the manufacturing costs going down, it follows logic that Apple will pass this on to its consumers and, therefore, the iPhone could possibly cost much less.
According to reports, even though Apple is keen to start production in India, the Indian government is not yielding to the company's request of special subsidies. Union Trade minister, Nirmala Sitharaman has said that the government would not be granting Apple any special tax incentives.
This statement has been made keeping in mind that India already provides reasonable subsidies to smartphone manufacturers. No other smartphone company receives tax incentives, as Apple is demanding. Sitharaman has also said that if Apple gets tax incentives, then the other manufacturers will get the same, on grounds of fairness of policy.
Apple manufacturer Wistron has already started building a manufacturing plant in Peenya, Bengaluru. Another Apple manufacturer, Foxconn already has its units in India. Apple boasts a substantial share in the Indian smartphone market and setting up a manufacturing plant in India would help Apple cement its position further.
According to IHS, it costs Apple $236 to produce a 16 GB iPhone 6s Plus. For its 64 GB variant, the company shells out an additional $17 but the consumer pays $100 more. It costs Apple $16 more for upgraded components in the iPhone 6s Plus when compared to the older-gen iPhone 6 Plus.
To add to Apple's woes, the iPhone is more expensive in some countries due to taxes and shipping costs. If the iPhone is manufactured in India, the production cost could possibly come down and, therefore, benefit consumers in other countries as well.
The dream of a cheap, pocket-friendly iPhone may soon be realized if the Indian government gives Apple the green signal to start its production in the country. As the talks continue, people will wait with bated breath for the much-awaited announcement which may give consumers a reason to celebrate.
