Apple has started selling its popular iPhone XR phones assembled in India, as it looks to expand its share in the world’s second-largest smartphone market where it has struggled against cheaper products from rivals.
That’s according to a new report from the Wall Street Journal, which explains that the budget iPhones are being assembled at Chinese contract manufacturer Foxconn’s India factory, helping Apple avoid high levies on the import of fully-built devices as well as meet local sourcing norms for opening its own retail stores in India.
The information comes as part of a larger WSJ report on the Asian country’s push to attract manufacturers to move their production lines there amid continued uncertainty in China amidst its trade war with the United States:
India is making a push to get Apple Inc. and other big brands to switch production there as the risks of manufacturing in China rise along with trade tensions.
Prime Minister Narendra Modi’s government has been trying to transform the country’s image as a difficult place to do business, promising a more predictable and open regulatory regime, a simpler corporate tax structure and incentives for targeted industries.
The government’s effort has become more pressing as the country struggles with an economic slowdown.
“India will be more attractive, particularly in the light of what is developing between the US and China,” Finance Minister Nirmala Sitharaman said in an interview with the Wall Street Journal […]
Foxconn upgraded its facilities to help make sophisticated smartphones, according to a person familiar with its investment. The iPhone XR is now being made in India for the local market, according to phone retailers and others familiar with its plans.
This made-in-India iPhone XR just hit the shelves, showing @narendramodi’s attempts to woo brands looking for alternatives to China may be working. His roadmap to rebrand India as the next great smartphone manufacturing hub revealed here. ??https://t.co/ThCS0RaYrI pic.twitter.com/IzdhVIUhhU
— Eric Bellman (@EricBellmanWSJ) October 20, 2019
India has reportedly offered deals to certain companies, which has, in turn, caused conflict between different government departments in that country. Now, the country is offering a 15% corporate tax rate to all countries that move manufacturing to the country in the future.
The report also notes that additional incentives are being offered to tech companies that manufacture in India with intent to export:
The government is crafting a new set of rules to encourage the creation of clusters of international phone brands and parts makers that would make phones exclusively for export, according to people familiar with the plans. Companies in the clusters would have lower import tariffs for components and would be first set up in states that guarantee rents and electricity bills won’t be raised for 10 years, the people said.
The Asian country is also reportedly relaxing existing rules that affect companies, paving the way for companies like Apple to open their own retail stores in India.