Advantage India: After bumper Apple yield, Tata's crop diversification

Apple's iPhone production in India has reached a significant milestone, with a freight-on-board (FOB) value of US$ 10 billion (Rs. 84,720 crore) in the first seven months of FY25 (April-October 2024). This growth is driven by three key vendors, Taiwanese companies Foxconn and Pegatron, alongside India’s Tata Electronics. Tata Electronics, primarily involved in iPhone manufacturing, is also looking to diversify by engaging with companies such as Microsoft, Dell, and HP. The aim is to emulate Taiwan's Foxconn model and become a major player in the global electronics manufacturing landscape. This expansion aligns with India’s broader ambitions under the Make in India initiative, which focuses on increasing local value addition in electronics manufacturing. 

To further boost local manufacturing, the Indian government is expected to propose a US$ 4.72 billion (Rs. 40,000 crore) package to encourage the production of electronic components. This initiative aims to reduce reliance on imports and increase local value addition to 35-40% during the scheme's five-year tenure, with a long-term goal of 50%. With India's demand for electronic components projected to grow from US$ 45.5 billion (Rs. 3,85,476 crore) in FY23 to US$ 240 billion (Rs. 20,33,280 crore) by FY30, the government’s push is essential for integrating domestic companies into global supply chains. While the Production-Linked Incentive (PLI) schemes have shown success in the smartphone sector, India faces challenges in capturing a larger share of the global electronics supply chain, particularly due to structural and policy issues that need addressing to remain competitive against countries like Vietnam and Thailand. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.