Apple’s Bold Move – Shifting Supply Chain from China to India Signals at ‘Achche Din’

The tech giant Apple has announced plans to relocate a substantial portion of its supply chain operations from China to India over the next three years. This strategic maneuver, intended to diversify Apple’s manufacturing base and reduce reliance on China, is expected to not only reshape the global supply chain landscape but also generate employment opportunities in India’s burgeoning tech sector.

According to sources, Apple aims to employ a staggering 500,000 people directly within India’s ecosystem of component makers and suppliers, marking a remarkable increase from the current level. Currently, Apple is responsible for approximately 150,000 blue-collar jobs in India, making it the single largest job creator in the country.

The decision to shift away from China aligns with Apple’s broader strategy, famously known as the China Plus One policy, aimed at diversifying its manufacturing footprint and enhancing local value addition from its suppliers. Neil Shah (Vice President at Counterpoint Research) emphasized India’s growing importance as both a market and a manufacturing hub for Apple, especially in light of its substantial local value-addition potential.

India’s current contribution to iPhone manufacturing stands at 14%, compared to 41% in China. However, experts believe that with the right investments and expansion, India has the potential to increase this figure to over 20%. This growth trajectory could position India as a key player in Apple’s global supply chain ecosystem, potentially catalyzing a vibrant supplier ecosystem and positioning the country as a hub for research and development, particularly in software-to-silicon design.

Apple’s suppliers in India, including Tata Electronics, Salcomp Technologies, Foxlink, and Sunwoda, have emerged as top job creators, with estimates suggesting that the production-linked incentive (PLI) introduced in August 2021 has already contributed to the creation of 150,000 direct jobs and an additional 300,000 indirect jobs.

Contract manufacturers such as Foxconn, Wistron, and Pegatron, responsible for iPhone production in India, have also played a significant role in job creation. Last year alone, these manufacturers collectively created over 77,000 direct jobs, with plans to hire more than 10,000 additional employees during peak production periods.

Apple’s increased focus on manufacturing in India is reflected in its production numbers, with iPhones worth over INR 1 lakh crore produced in India in the previous year, a substantial increase from previous years. Tim Cook (CEO of Apple) highlighted the company’s strong performance in emerging markets, including India, during the recent earnings call, emphasizing robust double-digit growth and record-breaking sales figures in several countries.

As Apple embarks on this ambitious transition, it not only underscores the evolving dynamics of the global supply chain but also presents India with a unique opportunity to emerge as a key player in the technology manufacturing landscape. With the right strategic investments and policy support, India has the potential to not only attract global tech giants but also drive innovation and job creation in the years to come.

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