Apple achieves Rs 1 lakh cr production in 2023 in India

The apple of India’s contract manufacturing eye, the iPhone, quietly crossed the landmark of output from India last year by crossing the Rs 1 lakh crore output value from India, The Economic Times has reported. While this value marks a rapid rise from the value of made-in-India iPhones manufactured in 2022, the company exported handsets worth Rs 65,000 crore between January and December last year.

“To be sure, Rs 1 lakh crore is the freight on board (FOB) value at which the devices leave a factory. The market value of the production could be anywhere between Rs 1.5 lakh crore and Rs 1.7 lakh crore, depending on taxes and dealer margins of various countries,” said an official aware of the matter.

According to industry terminology, FOB price refers to the price of any item at the factory gate. This value is devoid of the taxes and other various charges that are applicable to the product.

It was stated that the output went far beyond the targets laid down by the PLI (production-linked incentive) scheme. This feat might allow the contract manufacturers for Apple to claim more incentives. The PLI scheme works out the incentives based on the FOB price of any item.

“Apple has delivered on the promise of making India a second home for iPhone manufacturing. The company is now expanding its supply chain in the country,” said an official who also preferred to remain anonymous.

Apple’s production beyond the PLI targets also goes to display its confidence in the manufacturing systems in India. The company is trying to diversify its manufacturing bases beyond China.

In the process Apple could have emerged as the biggest phone manufacturer in India by value.
Counterpoint data suggest that iPhones have also been able to capture 6% of the market in FY23 up from 2% in FY18. The market share of its great rival, Samsung, skidded from 26% to 20% in the same time period.

Value wise, Apple’s business in India from Rs 13,097 crore to Rs 49,322 crore. Despite a shrinking slice of the pie, Samsung’s mobile business, too, made impressive gains from Rs 37,349 crore to Rs 70,292 crore in these five years.
The Apple story in India is a runaway success. It is putting together a robust ecosystem of Indian suppliers to carry out its manufacturing process in India. It also includes the Tata group.

The feat of Apple also comes in the nick of time. This week US trade representative Katherine Tai is visiting New Delhi to participate in Indo-US Trade Policy Forum discussion.

Apple has three prominent contract manufacturers in India. These are Foxconn, Pegatron and Tata-owned Wistron. The last named is the latest entrant in the game. All of these are entitled to incentives under the Central scheme.
Foxconn makes iPhones for Apple in China. This Taiwanese company is also the leading manufacturer of iPhones in this country. It accounts for as much as 68% of the total output of iPhones in India. Pegatron manufactures 18% and Wistron makes 14% of Apple’s output in India.

Apple produced and exported five iPhone models-the 11, 12, 13, 14 and 15-in 2023. However, it did not manufacture the top-of-the-line Pro and Ultra models of iPhone 15 in India.

Foxconn exported about 58% of its total production of iPhones in 2023. The rest 42% were sold in India. But Pegatron exported about 80% of its output while Wistron sold abroad 96% of its production.
In FY23, Apple became first brand to achieve exports of $5 billion from India.

Of the 14 PLI schemes announced by the Centre in FY21, the scheme for smartphones has been widely reckoned to be a smashing hit.