Apple Inc AAPL is looking to begin manufacturing its iPad devices in India this year in a bid to move away from Chinese manufacturing, Reuters reported Thursday.
What Happened: The tech giant would most likely turn to one of its existing suppliers in India for assembling iPads in the country as early as this year, people familiar with the matter told Reuters.
The Tim Cook-led company is said to be in the process of diversifying production to India and Vietnam in order to avoid the fallout of the ongoing trade war between the United States and China.
Apple’s existing contractors in India include Hon Hai Precision Industry Co. Ltd HNHPF — better known as Foxconn, Wistron, and Pegatron — all Taiwanese companies.
Why It Matters: Existing iPad assembler BYD Electronic International, a subsidiary of BYD Company Ltd BYDDY, faces barriers to entry in India, amid the country’s wariness on Chinese firms, noted Reuters.
India has a $6.7 billion plan to bump exports of smartphones. The government is also planning a performance-linked incentive that will offer cashback to manufacturers for exports and has a budget of INR 70 billion ($964.5 million) over a five-year period.
The scheme is expected to be launched at the end of this month but Apple and others are lobbying for a bigger budgetary allocation of INR 200 billion ($2.75 billion), reported Reuters.
In December, Pegatron’s factory in India was attacked by irate workers who claimed brutal exploitation.
Price Action: Apple shares closed nearly 0.9% lower at $129.71 on Thursday and fell 0.55% in the after-hours session.
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