India offering incentives for Samsung, Apple, and others for investing in local production

The ongoing diplomatic tensions between China and several countries have now prompted companies that do business there to reconsider alternative investments. With the bulk of their manufacturing and supplies provided by Chinese labour, Apple and Samsung reportedly expressed plans to move some of their operations to other regions. India is shaping up to be the next option for several tech groups and its government is seizing the opportunity by offering attractive incentives.

As indicated by analysts, the South Asian country has the potential to become the world's next manufacturing epicentre. There are currently 16 companies that would benefit from the programme and the majority of which have ties to the smartphone industry. These include Samsung, Apple, AT&S, Foxconn, Pegatron, Wistron, and other Indian firms with Prime Minister Narendra Modi leading the campaign.

To qualify, the production volumes should be bumped up, which might not be difficult given the remarkable growth of India's smartphone market. A report from CNN indicates the companies stand to receive incentives worth four percent to six percent of their product sales in the country in the span of five years. In turn, the government projects an estimated $1.5 billion in total investments for its electronics manufacturing industry.

Unlike its competitors, Apple's offerings normally sell for a premium price in the country. An example given shows that a 64 GB iPhone XR retails for $120 more than what it typically sells for in the United States. On the other hand, if the company manufactures it locally, it can circumvent certain taxes and import fees to make it cheaper for Indian buyers.

IDC senior research manager Kiranjeet Kaur says the government's incentive programme could mean that "more of the local India iPhones sales is catered by the locally produced iPhones, which would bring down the cost." Despite the growing anti-China sentiment among the Indian population, the top-selling smartphones are notably from Chinese brands.

Xiaomi appears to be on top, while Oppo, Vivo, OnePlus, Realme, and others equally popular among consumers. Samsung is likewise reporting favourable sales with Apple now officially selling its products just recently. Data shows the latter accounts for less than two percent of the region's smartphone sales.