India has slashed import tariffs on critical iPhone components—including PCBAs, camera modules, and displays—to 0%, effective May 2024. The move supports Apple’s target of producing 25% of global iPhones in India by 2027. Foxconn, Pegatron, and Wistron are expanding local facilities, with $420 million in new investments reported. Analysts estimate the tariff cut lowers landed costs by 12–18%, though domestic component sourcing remains at just 37% of bill-of-materials value. India’s iPhone output rose from under 1 million units in 2019 to 12 million in 2023.
According to firstpost.com, India has reduced import duties on key iPhone components to 0%, a move expected to accelerate domestic manufacturing capacity for Apple devices.
Tariff Reductions Target Critical Components
The Indian government eliminated import tariffs on printed circuit board assemblies (PCBAs), camera modules, and display assemblies—three essential subassemblies used in iPhone production. Previously subject to duties ranging from 10% to 15%, these components now enter duty-free under the latest customs notification effective in May 2024. The policy shift directly supports Apple’s stated goal of sourcing 25% of global iPhone production from India by 2027.
Manufacturing Expansion Underway
Foxconn, Apple’s primary contract manufacturer, has expanded its operations in Tamil Nadu and Uttar Pradesh, with new facilities slated to begin volume production of iPhone 15 models by Q3 2024. Pegatron and Wistron—two other major Apple suppliers—have also increased local investment, committing over $420 million collectively to expand assembly lines and testing infrastructure across Karnataka and Maharashtra.
Supply Chain Implications
The tariff cut reduces landed cost for component imports by an estimated 12–18%, according to industry analysts cited in the report. This margin improvement helps offset higher logistics costs associated with India’s current port-to-factory transit times, which average 14 days compared to 6 days in Vietnam. For supply chain professionals, the change lowers total cost of ownership for nearshoring strategies but does not yet resolve bottlenecks in component-level localization—only 37% of iPhone bill-of-materials value is currently sourced domestically.
Broader Industry Context
India’s move follows similar tariff rationalization efforts by Vietnam, which reduced duties on semiconductor packaging materials by 5 percentage points in early 2023, and Mexico, where electronics component duties were trimmed to 2% under the USMCA framework. Apple’s India manufacturing footprint has grown from assembling fewer than 1 million units annually in 2019 to an estimated 12 million units in 2023, per data cited in the source.
Source: firstpost.com
Compiled from international media by the SCI.AI editorial team.
