India has progressed a lot in the technology and software category in the last few years. India’s current government has put a lot of efforts to encourage startups in the country and has attracted various multinationals to their country. Amazon was set up in India 5 years back and Apple started manufacturing iPhone SE in India last year.
Recently, Apple has decided to initiate production of the iPhone 6S in India as well. This clearly shows how good the economic policies of the Indian government are and how they are working for their country. Apple has outsourced the production to India to Wistron. It is one of the most prominent partners of the Cupertino giant. Wistron set up a factory in Bengaluru last year to start production of the iPhone SE locally. Reports are that the same facility will be used for the production of the iPhone 6S. When SE was launched Apple had over 63% market share of the premium segment.
Currently, it is lagging behind Samsung and OnePlus. The iPhone 6S makes up for nearly 33% of total iPhone sales in the country. This is perhaps the reason that Apple decided to manufacture it instead of any other model. The production is expected to start soon. Some models will be imported in order to meet the demand. ‘Made in India’ models are expected to be sold in few months. The main reasons behind Apple deciding to produce the phone locally is that the import duties have increased a lot. The Government has increased the import duties. The Government increased the import duties on mobile phones from 10 to 15% a few years back and now it has further increased to 20%.
The excessive rate of tax can be accredited to the Government’s Made in India Initiative which was introduced in 2014 and is focused on 25 sectors which include automobiles, smartphones, and IT. Apple also aims to open two flagship retail stores in Mumbai and Delhi. Despite being produced locally, there won’t be a price cut. Apple will have to import the phones until production capacity meets the demand. Reducing the price will substantially affect the profits, which is perhaps not acceptable to the tech giant.