Apple Inc. gets approval to set up manufacturing unit in Bengaluru

Team Udayavani, Feb 4, 2017, 10:19 AM IST

Bengaluru: The Karnataka Government has accepted Apple Inc.’s proposal to begin manufacturing operations in Bengaluru.

According to a press note released by Priyank Kharge, Minister of State for Information Technology and Biotechnology and Tourism, the Karnataka Government is ready to undertake any initiatives that will foster growth in the manufacturing sector and will provide a feasible atmosphere for investment.

“Apple’s representatives led by Ms. Priya Balasubramaniam, VP iPhone operations, Mr. Ali Khanafer (Head, Government Affairs), Mr.Dheeraj Chugh (Director, iphone operations) and Mr. Priyesh Povanna (Country Counsel) met with Ministers and officials of Government of Karnataka and had positive discussions about the initiatives in manufacturing and possible collaborations with state Government in other areas,” said Kharge via the press note.

Additionally, Kharge also said that the decision to manufacture iPhones will enhance Bengaluru’s reputation as the most viable destination for foreign investment and further validation of the state government’s policies aimed at fostering manufacturing innovation and investments in the state.

“Apple’s intentions to manufacture in Bengaluru will foster cutting edge technology ecosystem and supply chain development in the state, which are critical for India to compete globally,” added Kharge.

Apple had earlier applied to open retail stores in India, with a vision to increase its presence in the fast-growing South-Asian market. Apple currently sells iPhones and other products in India through local distributors, but it lags far behind Samsung and Chinese brands such as Xiaomi, Oppo and Lenovo in terms of market share.

India has more than 300 million Smartphone users, according to technology research firm Counterpoint. It is projected to overtake the U.S. as the world’s second largest Smartphone market this year. Therefore, the potential payoff is huge. India’s fast-growing middle class presents an obvious opportunity, but with average annual incomes of INR 100,847.52, most of its 1.3 billion people can’t afford Apple’s expensive products.

“If you’re importing complete units the taxes for those are increasing and we don’t see the government backing down in that regard. For Apple, not having manufacturing in India raises the price of the iPhone even more,” said Kiranjeet Kaur, a research analyst at consulting firm IDC.