Karnataka gets a slice of Apple pie, iPhones to be manufactured in Bengaluru

IT Minister Priyank Kharge told TNM this validated the state’s focus on emerging technologies and high-end manufacturing.
Karnataka gets a slice of Apple pie, iPhones to be manufactured in Bengaluru
Karnataka gets a slice of Apple pie, iPhones to be manufactured in Bengaluru
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Karnataka’s initiatives towards promoting a technology and business-friendly environment received a major boost, with the global technology manufacturer Apple Inc. proposing to start manufacturing operations in Bengaluru in the next few months.

A media release issued by IT Minister Priyank Kharge, said, ““Apple’s intentions to manufacture in Bengaluru will foster cutting edge technology ecosystem and supply chain development in the state, which are critical for India to compete globally.”

The release also said that Apple’s representatives had met ministers and officials of the Karnataka Government and, “had positive discussions about the initiatives in manufacturing and possible collaborations with state Government in other areas”.

Speaking to The News Minute, Minister Priyank Kharge said that Apple’s foray into Bengaluru validated Karnataka’s conducive environment and the ease of doing business in the state that the government has been claiming. “Our focus on emerging technologies and on high-end manufacturing is also validated,” he said.

He added that Apple’s entry will open the door for many other OEMs (original equipment manufacturers) interested in similar manufacturing sectors, and that this will have a cascading effect on micro, small and medium-sized enterprises.

“And knowing that Apple is a technology company and not just an iPhone manufacturing unit, this will also help the technology ecosystem here. Whether it’s for app development or for startup accelerators or the whole host of things that Apple does as a technology company, we’ll be able to tap into that ecosystem as well,” he said.

“This just goes on to validate our position and the unique advantage that our government gives when it comes to skilling, emerging technologies, policy understanding and so on,” he added.

On what this development does for Karnataka vis-à-vis it’s competitive positioning with regard to competing states like AP, Telangana and Tamil Nadu, he said, “When the most valued company in the world today is validating your ecosystem, it’s a good thing for us.”

The Minister confirmed that manufacturing operations in Bengaluru would be of Apple’s flagship iPhone series, but did not confirm which Apple OEM would be setting up operations in the city. However, earlier reports have cited government sources as saying that Taiwanese OEM, Wistron, would be setting up base. Kharge also said that he was positive that manufacturing operations would begin in Bengaluru within the next quarter.

The manufacturing centre in Bengaluru will allow Apple to be more competitive in its pricing of iPhones, as its imports are currently subjected to additional duty of 12.5%. Currently the pricing of iPhones in India have set them firmly in the luxury market, with Apple shipping just 2.5 million iPhones in 2016, compared to the 29 million smartphones that Samsung sold last year.

The news of Apple’s foray into Bengaluru comes at a time when Apple has been engaged in negotiations with the Indian government over local resource sourcing requirements. Recent reports indicate that the government has been reluctant to concede the long tax holiday Apple has been asking for, in relation to sourcing requirements. 

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