Apple in preliminary discussions to start manufacturing in India

The idea of Apple manufacturing its products in India is nothing new, but Apple is seriously considering it now, according to The Wall Street Journal.

Meanwhile, preceding Tim Cook's India visit and his meeting with Prime Minister Narendra Modi in May, buzz was around that Apple is keen to manufacture its products in India and is also setting up its own flagship stores.

To sell the latest iPhone 7 and 7 Plus in India, Apple Inc. partnered with e-commerce giant Flipkart, both phones launched in October. Macrumors stated, Apple doesn't have the license yet to directly sell products to consumers in India. Furthermore, Foxconn, the Chinese manufacturer that makes various Apple devices such as iPhones and iPads, owns a manufacturing facility in Southern India.

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According to Zauba.com, accessories boxed with the iPhone are taxed separately, and only past year, taxes in India were more than double of the custom duty paid for the iPhones at 28.85%. It is also seeking financial incentives from the government for the same.

Apple has been trying for quite some time to open retail stores in India, but has been turned off by the government required 30% cut on products.

India's smartphone market is expected to eclipse the U.S.by next year, coming in second to China, according to market research firm IDC. Apple sought for relaxation as a pre-condition for bringing in FDI to set up single-brand retail stores in the country. By agreeing to assemble iPhones in India, where Foxconn already has smartphone assembly units for various brands like Xiaomi, Nokia and InFocus, the prices are likely to drop. Labor costs are low, and India is still within fairly close proximity to Apple's long list of Asia-based component suppliers.

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Rumours about Apple's Make in India plans and flagship retail stores have been doing the rounds for nearly a year now.

In China, where Apple is performing better, but still not satisfactorily, efforts have also been made throughout 2016.

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