Apple suppliers to invest $900 million in India

New Delhi

Three of Apple Inc’s top contract manufacturers plan to invest a total of almost $900 million in India in the next five years to tap into a new production-linked incentive plan, according to two sources familiar with the matter. Foxconn, Wistron, and Pegatron all plan to make investments under the scheme said the sources, who asked not to be named as the discussions are private.

India’s new $6.65 billion production-linked incentive (PLI) scheme offers companies cash incentives on any increase in sales of locally-made smartphones over the next five years, compared with 2019-20 levels. The scheme aims to help transform India into an export manufacturing hub.

Foxconn has applied to invest about 40 billion rupees ($542 million), while Wistron and Pegatron have committed to invest close to 13 billion rupees and 12 billion rupees, respectively, under the PLI plan, the sources said.

It is unclear whether all of the investments will be targeted at boosting the manufacturing of Apple devices in India, but the sources and industry insiders said the vast majority would be focused on expanding iPhone manufacturing in the country. While Foxconn, Pegatron, and Wistron make devices for companies other than Apple globally, Wistron’s arm in India currently assembles only iPhones.

Wistron, which assembles roughly 200,000 second-generation iPhone SEs per month in India, plans to scale that up to 400,000 a month by the end of the year, one of the sources said, as it looks to cater to export demand for the device. That plan is expected to create roughly 10,000 jobs, the source added.

Pegatron is yet to start Indian operations, but has been in talks with several states, with Tamil Nadu in the south emerging as a frontrunner for a planned plant to manufacture Apple devices, a third source said. Foxconn, which also assembles devices for Xiaomi in India, already has enough capacity to meet Xiaomi’s needs and is likely to use the PLI plan largely to boost iPhone production, a fourth source said. The commitments would help Apple diversify its supply chain beyond China, which is locked in a trade war with the United States.