Indian government rejected most of Apple’s demands, but iPhone manufacturing to start anyway within 4-6 weeks

The WSJ reports that while the Indian government has rejected most of Apple’s demands for concessions, the company will go ahead with iPhone manufacturing in the country – and that production will begin within 4-6 weeks …

This tallies with a report from last month which said that Apple planned to go ahead with local manufacturing in India whether or not the government agreed to financial incentives. India’s Economic Times reports that the government declined most of Apple’s requests yesterday.

WSJ’s report comes a day after the government said it has not accepted “most of the demands” of iPhone maker, which wants to set up manufacturing unit in India. To a question in Rajya Sabha on whether the government has accepted most of the demands of the iPhone manufacturer, Commerce and Industry Minister Nirmala Sitharaman said, “No”.

Apple had asked for a range of incentives, including a 15-year relief from import tariffs, in return for setting up an iPhone plant. But last month’s report suggested that it would proceed either way for two reasons: to reduce retail costs to grow market share, and to gain experience of small-scale manufacturing in the country.

The WSJ also supports earlier reports that the plant would be established in Bengaluru and operated by Wistron, not Foxconn. It does, however, differ in one respect: suggesting that Apple will be making the iPhone 6 and 6S rather than the lower-cost iPhone SE. This seems surprising given that cost is a key factor in India.

Sales figures from the beginning of the year illustrate the importance of India as a growth market for Apple: while the global smartphone market grew only 3% last year, smartphone shipments in India grew by 18%. Apple is currently in 10th place in Indian smartphone sales.

Photo: Surge