New Delhi wants tech giants to boost production of iPhones ‘made in India’

India expects global IT giants like Apple, Foxconn and Flextronics to boost production on its soil due to new favorable taxation laws, aimed at drawing in manufacturers.

“We are already the second biggest manufacturer of mobile phones in the world. Now, even Apple is coming in a big way, Foxconn 2 and 3 are going to be established. Apple reportedly is going to open its biggest state-of-the-art shop in Mumbai, and Samsung is withdrawing from China,” Indian Communications, Electronics & Information Technology Minister Ravi Shankar Prasad said in an interview with ET.

He said that his country is up in arms competing to replace China as the globe’s number-one manufacturing hub in electronics.

“The biggest day for me will be to pick up an Apple phone and read, designed by Apple in California, assembled in India, replacing China. I see that happening soon,” Prasad stated.

New Delhi recently introduced new tax legislation that significantly cuts taxes in the manufacturing sector. Prasad says this move was aimed at making India more attractive to manufacturers, both in international and domestic markets.

“We have redone the entire architecture of taxation law as far as manufacturing is concerned. As of now this corporate tax cut in itself is massive,” the minister said, adding that while “mobile phones already are a success story,” the government sees production of “consumer and medical electronics” as the next step in production expansion. In his interview last month, Prasad also pointed to strategic and defense electronics as the focus points of India’s manufacturing aspirations.

In September, the Indian government urged iPhone maker Apple Inc. to expand its manufacturing base in India and use the country as an export hub, unveiling plans for a new system to boost electronics and the phone industry in the next two to three months. This came in response to Apple starting to source battery packs from an Indian plant for iPhones both sold in India and for export by its US contract manufacturer.

The majority of Apple suppliers come from China, with Chinese companies such as CCL Design, Yuto Electronics and Sunwoda Electronics providing packaging material and printing technology to the phone maker. According to media reports, however, Apple recently asked its suppliers to shift up to 30 percent of their production from China to other countries, and India is viewed as one of the most favorable destinations. The move, among other things, is aimed at reducing Apple’s dependence on China amid the ongoing trade and tariff dispute between Washington and Beijing.

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