News & Analysis

Apple Makes the Most of PLI Scheme

The global giant created around 50,000 direct jobs over the past 15 months and is now making more than 85% of the devices that it sells in India

When Covid-19 hit China late in 2019, none could have predicted the global ramifications of the virus, both in terms of the pandemic proportions and the manner in which businesses would respond to it. The most obvious has been Apple’s decision to shift a chunk of its device production out of China and the impact of such a move on Indian shores. 

Today, Apple claims to be producing more than 85 percent of its local sales in India as against importing more than 90% from across the Chinese border. Contract manufacturers associated with the US giant have used the government’s production-linked incentive (PLI) scheme the best since it was launched in October of 2020. 


50,000 new jobs and counting

As on date, these manufacturers and component suppliers have created more than 50,000 new jobs in the country, in addition to about 100,000 indirect ones, according to government data. Apple has three contract manufacturers in India including Foxcoon, Pegatron and Wistron. While component suppliers include Avary, Foxlink, Salcomp among others. 

Government had announced the PLI scheme to coincide with reports of tech giants seeking options outside of China for their manufacturing supply chains, some of which got badly disrupted following the pandemic during 2020. Apple CEO Tim Cook had made the decision to move some part of the production out of China towards the latter half of that year.


Apple has started a trend now

Such has been the impact of Apple’s shift, that other competitors like Samsung too have set their sights on shifting production to India. According to data available on the PLI scheme, the Korean company has more than 11,000 people working at its unit in Noida, Uttar Pradesh, with indications of an expansion in the upcoming months.  

However, Apple stands tall when it comes to becoming the largest employer of blue-collar workers in India’s fast growing electronics industry. Official data indicate that Foxconn has more than 40% of these jobs at hits facilities in Tamil Nadu while the rest is divided between Pegatron, also in the same state) and Wistron which is based in Karnataka. 

In addition to these numbers, many more jobs, likely to be in the range of between thousand and two thousand, have been added by component and module providers who have expanded capacity for the iPhone supply chain over the past 15 to 17 months. What’s even more promising is that these success stories have prompted others to follow suit now. 


There’s the Tatas and the Adanis

Among these is the Tata Group which has set up a new plant spread over 500 acres at Hosur for manufacturing smartphone components for multiple brands including Apple. The plant, located in the city bordering Bengaluru, employees about 10,000 workers, which they propose to increase to 45,000 over the next 18 months. 

Another development relates to Gautam Adani’s proposal for setting up a semiconductor plant in the country as part of the government’s efforts to build self-reliance in the sector. Given the importance of microchips in every field of electronics, the move could reduce India’s dependence on global supply chains. 

As for the PLI scheme, the government had originally announced it during October 2020 and extended it by a year post the second wave of the pandemic. From Apple’s point of view, it was only after August of 2021 that the company began a focused effort to expand manufacturing in India as part of its efforts to spread the supply chain wider. 

As on date, the company manufactures the iPhones ranging from 11 to 14 in India, with the latest starting production locally barely ten days after the global launch. In the fiscal year 2021, Apple exported iphones worth Rs.11,000 crore and the number for this fiscal year is estimated to be double that of the previous year. 

Leave a Response