Taiwanese contract manufacturer Foxconn will invest well over $350 million (Rs 2,500 crore) to have new production lines to manufacture certain iPhone models in its factory in Sriperumbudur near Chennai in Tamil Nadu, said a recent Reuters report.

Titled Project Fruit, the plan to expand the Sriperumbudur unit of Taiwanese phone manufacturer Foxconn to make smartphones including the coveted iPhone has been in the works for over a year. “It has been a work in progress for over a year,” said a person directly involved in the project to manufacture iPhones from Tamil Nadu.

Apple is expected to assemble top-end iPhones in India as early as 2019. This would be the first time the Taiwanese contract manufacturer will have made the product in the country. Importantly, Foxconn will be assembling the most expensive models, such as devices in the flagship iPhone X family, the source said, potentially taking Apple's business in India to a new level.

Currently, Apple phones such as the iPhone 6S and SE models are made by another Taiwanese phone maker, Wistron, in Bengaluru in Karnataka.

Meanwhile, India's federal government is exploring specific policy incentives to woo Apple, along with other electronics firms, to make and export from India, said a top government official in an article in The Economic Times.

Apple is seeking a commitment of tax-breaks for five years under the Merchandise Exports from India Scheme (MEIS), besides income tax benefits for the proportion of exports made. Officials from the ministry of commerce and department of revenue have sought inputs from the Ministry of Electronics and IT for the proposed policy tweaks, the ET reported.

The move is because Apple doesn’t see India as a large domestic market and hence their plan is more export driven. Under the MEIS scheme, the government provides duty benefits of between 2-4% depending on the product and country where it is being exported to. Meity is in favour of expanding India as a hub of export for electronics through some of these incentive schemes.

These India-focused positive news for the Cupertino-based company come on the heels of the unexpected sales warning from CEO Tim Cook. On January 3, Apple had made a shock readjustment of its revenue forecast based on forecast of poor iPhone sales in China. The company's shares plunged 9.96% on Thursday and its market cap was down to $674.74 billion, a sharp fall from the $1.16 trillion capitalisation it had reached on October 3.

By: DocMemory
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