Apple of our eye, make in India 2.0

Apple’s export of locally made iPhones establishes India’s potential as a global manufacturing hub. The breathtaking growth of mobile handsets dispatched from the country serves as a beacon for Indian companies to build global brands. Earlier efforts to push manufacturing exports have faced technology, logistics and marketing hurdles. US, European and Asian carmakers have had mixed results with exports from India, leading to several exits. Their Indian rivals struggle with brand recognition in developed markets despite high-profile acquisitions abroad. Apple’s experience with its local contract manufacturers creates a new template for ‘Make in India’. For one, the technology giant plans to shift a big chunk of its global supply chain out of China. It also needs a bigger slice of the world’s second-largest telecom market. The company is receiving incentives to build a local vendor ecosystem. India is open to Apple’s Chinese vendors setting up local joint ventures. This allows Apple to speed up capacity building and local value addition.

India’s new pragmatism over building manufacturing value chains is expected to accelerate technology transfer. Tariff protection to a new crop of firms should aid the process. Large Indian companies are seeking roles higher up in Apple’s food chain such as retailing. As Apple expands its offerings further in services, it will need to diversify its data centre capacity. To that effect, India is ramping up digital infrastructure.

Unlike automobile manufacturers that made India a production base for other developing markets, Apple provides a uniform user experience worldwide through its hardware and software. This makes for highly integrated design, software development and marketing. And it makes for extraordinary customer loyalty. Apple’s success with exports from India to European markets during a grim phase globally for handset sales could pitch domestic manufacturing capabilities to a cohort of discerning buyers. This should widen the pathway for India’s electronic equipment exports.