The
Indian government
has initiated discussions with industry associations and companies to gather insights for developing policies that will encourage
electronics manufacturers
, including
Apple
, to expand their
design activities
within the country, according to sources familiar with the development.
The
Ministry of Electronics and Information Technology
(MeitY) has already conducted several meetings with industry organizations, such as the
India Cellular and Electronics Association
(ICEA), which includes Apple and other major
global electronics companies
among its members, a senior government official told ET.
The presence of more smartphone and component designing companies in India is expected to benefit the country’s end-to-end supply chain ambitions. For instance, while Apple has manufacturing facilities for its flagship products such as the iPhone, iPad, and AirPods across various countries, including China, India, Taiwan, Thailand, Vietnam, the Philippines, Malaysia, and Indonesia, the design of these products takes place at its headquarters in the United States.
The IT ministry has also approached various Indian Institutes of Technology to explore the possibility of conducting a feasibility study on this matter, another official said.
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The objective is to assess which components of the electronics supply chain are currently designed and manufactured in India and to identify the necessary steps to increase domestic value addition throughout the supply chain.
“The Principal Scientific Advisor’s Office and the Ministry of Electronics & IT have taken up this important task. This will enable us to capture a significant share of the global market in entry to mid-level products,” said Pankaj Mohindroo, chairman of ICEA.
The Indian government is determined to ensure that the intellectual property rights of various designs, excluding those related to semiconductors and chips, remain within the country, according an official said. The government aims to encourage more companies to enter the ecosystem of smartphone, notebook, and component design, despite the challenges involved.
To achieve this goal, the government should develop a tailored policy framework that incentivizes global lead firms to select India as their hub for innovation, design, and manufacturing, says Mohindroo. The presence of global companies can bring scale and catalyze the design revolution in India.
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Ajai Chowdhry, the cofounder of HCL and a member of the IT ministry task force on electronics manufacturing, believes that now is the opportune time for India to become a global leader in world-class product development and manufacturing, replacing China as the second reliable source.
Neil Shah, vice president at
Counterpoint Research
, emphasizes the significance of substantial investments across various segments, including semiconductor and component design, complete hardware, software, applications, and cloud, to transform into a major manufacturing hub.
Shah points out that while some chip R&D is conducted in India, the key components, overall product, software, and services are still primarily designed at the respective headquarters outside of India for smartphones and laptops. However, he anticipates that this situation may change in the near future.
“The scale and uniqueness of the India market will warrant companies to focus on localising their in-house design and partner ecosystem in India,” he said. “These ‘local-centric’ designs could be a huge differentiator for its diversification strategy for international tech companies. This could allow these companies to build a strong initial foundation to participate in the Indian growth story for the next decade spurred by local investments and partnerships.”
Nevertheless, Shah acknowledges that the sole challenge would be how certain companies navigate the diversification narrative considering the current geopolitical climate and the perception associated with relocating jobs or businesses away from the US or China, which could potentially harm local sentiments in those markets.
“This could be very strategic but also a slippery slope for some of the key companies to put eggs in all the baskets. It doesn’t have to be a zero-sum game,” Shah said.
