Why is Apple increasing its production in India?
Apple aims to manufacture 25% of its iPhones in India by 2028. In the start of the 2024-25 financial year, India started exporting $2 billion worth of Apple iPhones. India now assembles 14% of the world’s iPhones, becoming the third-largest iPhone exporter. The shift is largely due to Apple’s manufacturing partner, Foxconn, which has significantly increased its investment in India after reducing its production in China.
Why did Foxconn shift its production from China to India?
Foxconn decided to move due to rising labor costs in China and geopolitical issues. India’s “Make in India” initiative, which includes subsidies and tax incentives, attracted Foxconn to invest heavily in India. Foxconn’s investment in India has grown from an initial $1.4 billion to a substantial amount, reflecting the successful returns they’ve received.
Why is South India becoming a preferred investment destination for tech companies?
Port Connectivity: Southern states like Tamil Nadu and Andhra Pradesh have well-developed ports, making export easier and cost-effective.
Skilled Workforce: States like Tamil Nadu, Karnataka, and Kerala have strong education systems that produce a large number of skilled engineers and technicians.
Reasonable Land Prices: Land costs in Southern India are more reasonable compared to other regions like Maharashtra or Delhi NCR.
Strong Infrastructure: Better logistics infrastructure, including roads, ports, and power supply, supports business operations.
Tax Incentives and Business Policies: Southern states offer tax incentives, easier land acquisition, and faster regulatory approvals to attract investors.
Safety: Southern India is considered safer compared to border states, with fewer instances of unrest.
Industrial Environment: Long-established industries in Tamil Nadu and IT hubs in Karnataka create a supportive environment for new investments.
Why are investments flowing more into Southern India rather than Northern or Eastern India?
Southern India’s established infrastructure, favorable business environment, skilled workforce, and supportive government policies make it more attractive for investment compared to Northern and Eastern India. Although other regions also receive investments, Southern states offer a more stable and profitable environment for major companies.
Why are companies diversifying their supply chains away from China?
Companies are diversifying to reduce dependency on China due to geopolitical instability, trade wars, and rising labor costs. The “China+1” strategy aims to mitigate risks by establishing production in additional countries like India, Vietnam, and Indonesia.