As first rumored late last year, Apple’s manufacturing partners are full steam ahead on setting up production facilities in India, to make current generation iPhones. Domestic manufacturing is key to avoiding India’s hefty import taxes on foreign goods, allowing Apple to lower prices in the country.
Today, India’s IT ministry signed off on plans for a new $1m Wistron factory in India. It is expected that the factory will produce iPhone 8 phones whilst an ongoing factory proposal from Foxconn will manufacture ‘Made in India’ iPhone XS and iPhone XS Max models.
The Wistron factory application now needs approval from the Indian Cabinet to actually become a done deal. The Foxconn project is at an earlier stage of the process.
Currently, Apple sells domestically-manufactured models of the iPhone SE and iPhone 6S in India. These phones are still expensive compared to average Indian wages, but would be almost 40% pricier if they were imported due to government tariffs. Both the SE and 6S are no longer sold in the United States.
Apple knows that in order to grow demand for iPhone, they need to be able to make newer models in the country to keep prices down. Apple sees India as a huge potential growth market as their economy matures and the median income of Indian families rises over the coming years.
However, in raw market share numbers, Apple’s share of the smartphone market fell last year as customers favored Android handsets that are significantly cheaper to buy. Getting current-gen iPhones on sale without the import tariff price premium is just one step in the process of giving the iPhone a bigger foothold in the Indian market.