With the onboarding of five large firms as anchor suppliers under the Government of India’s Electronics Components Manufacturing Scheme (ECMS), Apple has made a big and strategic step towards bolstering India’s electronics manufacturing ecosystem. This initiative is a part of India’s larger goal to create a strong and independent ecosystem for electronics components. Together, these five businesses plan to invest around ₹30,537 crore to produce essential electrical components for Apple and the global electronics supply chain, according to a Business Standard article.
Nearly 73% of the ₹41,863 crore investment approved by the Ministry of Electronics and Information Technology (Meity) for 22 enterprises under the third tranche of the ECMS is made up of anchor vendors. Despite India’s quick rise to prominence as a worldwide hub for smartphone assembly, the program is intended to provide output-linked incentives to encourage domestic manufacture of electronic components, an area where the country has traditionally remained dependent on imports.
Significant investments and the creation of jobs
These anchor investments are anticipated to provide more than 27,600 direct job opportunities, according to government projections included in the study. Furthermore, a number of indirect employment in the logistics, tooling, component supply, services, and related industries are probably going to be generated. Although all five companies already supply Apple, the size and scope of the planned production facilities will enable them to also service other local and international electronics manufacturers. This is anticipated to greatly increase India’s supplier base and lessen its need on buying components from other countries.
In the upcoming stages of the ECMS, Apple apparently intends to recruit more manufacturing partners. The business has been aggressively searching for producers of cutting-edge equipment and subassemblies needed for the fabrication of smartphones. Following Meity’s approval of the next round of applications under the program, further collaborations are anticipated to be revealed.
Important figures and places of strategic concentration
Three well-known Indian companies—Tata Electronics, Motherson Electronic Components, and aluminum giant Hindalco—as well as two multinational corporations are among those that have been approved. These include ATL Battery Technology India Ltd., a subsidiary of Japan-based TDK Corporation, and Yuzhan Technology, a Foxconn group firm that is presently the scheme’s largest investor.
The production of iPhone enclosures is one of Apple’s main areas of concentration under this project. The company’s goal is to develop end-to-end enclosure manufacturing capabilities in India. The goal is to establish India as a worldwide sourcing hub for enclosures, including supply to China, in addition to satisfying domestic needs and promoting exports. Only a small percentage of the enclosures used in iPhones made in India are now obtained domestically, mostly from Tata Electronics.
In addition to the Tata Group, Foxconn and Motherson are investing about ₹27,166 crore to establish many production sites in different parts of the nation. With an investment of about ₹449 crore, Apple has also partnered with Hindalco to build an aluminum extrusion factory, a crucial raw material for enclosures, in order to further enhance value addition. ATL Battery is also investing almost ₹2,922 crore to establish a manufacturing facility for lithium-ion cells in Noida.
Long-term goals and government assistance
In this round, the government has accepted 22 more applications under the ECMS, bringing the total number of enterprises approved under the plan to 46 with a promised investment of ₹54,567 crore. TDK India, BPL, Wipro Hydraulics, Samsung Display, Dixon Technologies, and other companies have received permits for a variety of components, including capacitors.
Participating firms have been advised by Union IT Minister Ashwini Vaishnaw to develop strong internal design capabilities, follow Six Sigma quality standards, boost domestic sourcing, and work together on shared design infrastructure. The government anticipates that these expenditures would greatly increase local value addition in smartphones, from the present 15–20% to around 35% over time. This would be a huge step toward India’s goal of becoming a worldwide leader in electronics manufacturing.
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