Apple and the difficulties of starting production in India

Just as Apple is facing the problems of poor diversification of its supply chain, still too tied to China, a new report published by The Information sheds light on the difficulties that Apple has encountered in bringing the part of production to India.

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There too much dependence of Apple on China it has made society vulnerable during events such as the trade war between the US and China, but also during this period in which the coronavirus epidemic effectively blocked a large part of production across the country. L’India it was one of the first alternatives chosen by Apple, with many problems.

First of all, themanufacturing industry in India is less developed and compared to China, there is a shortage of highly skilled labor and there are very few companies capable of producing components such as speakers for smartphones or headphones.

It is also difficult for Apple to find local suppliers capable of comply with strict liability policies. For example, one company, Superpacks, has violated a dozen such policies. After months of deadlines and missed communications, Apple has abandoned Superpacks as a business partner.

The reason why companies are not improving their facilities or internal working conditions is related to the size of Apple’s orders in India. These orders are estimated at thousands per month, while Apple’s orders in China can reach hundreds of thousands per week.

Government regulations on production and import duties also play an important role in the affair. But while the Indian government has been reluctant to flood Apple with tax incentives, local media reports indicate that Apple has recently promised to invest $ 1 billion in the country.

There are many other challenges to better start production in India, such as the need to import raw materials, the poor quality of Indian roads and the fact that finding industrial land would be difficult because Indian landowners have more rights than Chinese ones.

Apple CEO Tim Cook called India a “Big chance“For the company, but it seems that Apple’s efforts to create production lines are aimed at the local rather than the global market. In other words, Apple’s efforts in India seem to focus only on receiving the necessary authorization to open the first stores in the country and to increase iPhone sales.

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