There is no doubt that China dominates the world market. From food and clothing to technology and everything in between comes from China. But due to the coronavirus pandemic, the world economy is at risk. And most companies that depend on China are now shifting away from it.
One company that’s most likely to shift its dependency on China is Apple. According to new reports, Apple is possibly moving a significant amount of production away from China. And it plans to shift almost 20% of its production to China’s neighbor India.
Apple to be India’s Largest Exporter
In the past few months, India’s top-ranking government officials and Apple’s senior executives have held several meetings. And they’re examining the possibilities of Apple shifting its production from China to India.
If all goes well, Apple becomes India’s largest exporter with plans of manufacturing almost $40 billion worth of smartphones in the next five years.
The decision is based on India’s production-linked incentive (PLI) scheme. It was the Indian government’s initiative to boost local manufacturing of electrical products.
According to the scheme, a company should manufacture at least $10 billion worth of smartphones in under five years.
The issue with PLI
Currently, Apple sells $1.5 billion worth of phone in India. But only $0.5 billion are manufactured locally.
However, Apple has some issues concerning the plan, especially when it comes to the plant and machinery that’s already in use in China and how the PLI scheme values it. But the government says that they’re looking into coming out with a beneficial deal soon enough.