India is set to implement a series of subsidies and tariff cuts designed to lower production costs for Apple and other smartphone makers as part of broader efforts to become a global electronics manufacturing hub (via Bloomberg).

India is proposing $2.7 billion in financial incentives and tariff adjustments aimed at the electronics sector, especially smartphone makers such as Apple. The measures are aimed at boosting production of critical components such as batteries, camera modules and microprocessors, which are currently largely imported from countries such as China.

Prime Minister Narendra Modi’s government had previously implemented several initiatives, including the Manufacturing Incentive (PLI) scheme, which attracted large companies such as Apple and Samsung to set up or expand their manufacturing capabilities in India. The purpose of the new proposal is more specific and specifically aimed at creating a domestic component supply chain.

Apple is steadily expanding its production in India. The company began assembling iPhones in India in 2017, initially focusing on older models. More recently, Apple has stepped up its efforts, with iPhones made in India now accounting for approximately 15% of the company’s global production. It is noteworthy that iPhone 16 saw its production begin in India just weeks after its global launch.

The proposed subsidies could further accelerate Apple’s plans to localize production, potentially allowing for the simultaneous launch and production of future models such as iPhone 17both in India and China. A final decision on these measures is expected to be announced during the preparation of the upcoming federal budget in February.

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