Moving Apple production to India faces obstacles – huge levels of marriage, bureaucracy and sluggishness
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India has been chosen by Apple as the next region to expand its manufacturing operations, as the experience of recent years with the pandemic and US sanctions has left it somewhat disillusioned with China. Experts explain that the migration of industries to India will be complicated by the clumsy bureaucratic system and the specifics of doing business in this country.
Image Source: Wistron
A representative of one of the companies producing electronics in southern India, in general, in an interview with the Financial Times, said that Apple was a little late with this initiative, and they should have started moving production to India five years ago. In this case, the company would be able to reap the benefits of this migration right now, and in modern conditions it will take at least three years to adapt to local realities.
Apple has already begun to send its engineers on long business trips to help the company’s partners launch the production of this brand in India. Experts are faced with the fact that local manufacturers are less agile in their willingness to quickly make changes to business processes and technologies than Apple’s Chinese partners. In addition, after receiving a contract, Indian contractors show much less interest in responding to criticism from the customer.
So far, the quality of local products is also suffering. For example, in one of the Indian enterprises for the manufacture of body parts for Apple products, the defect rate reaches 50%, and for an American company striving for zero defects, this is a shockingly high figure. While working in southern India, American engineers also face infrastructural problems. For example, they have to spend four hours a day on the road from their place of residence to their place of work and back, and to spend this time productively at the computer is hindered by unstable communications along the route.
Indian conglomerate Tata is looking to become Apple’s manufacturing partner in the country, currently eyeing a local Taiwanese Wistron facility it is considering buying. This enterprise has already organized the assembly of Apple smartphones.
Analysts at Bain believe that all these difficulties will be overcome in time, and by 2028, exports of industrial goods manufactured in India will more than double to $ 1 trillion in value terms. Only in the direction of electronics, export volumes during this period will grow by an average of 40% annually. The Indian authorities are ready to promote the development of local production, and even contradictions with China in this case do not prevent the Indian authorities from approving the creation of joint ventures by Chinese suppliers of components with Indian partners on a parity basis. The fiscal authorities of India are considering the possibility of reducing the tax burden on the import of components used for the production of electronics in the country.
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