"Apple's decision on initial manufacturing in Bengaluru has further enhanced the reputation of Bengaluru as the most preferred destination for foreign investment and further validation of the state government policies aimed at fostering manufacturing, innovation and investments in Karnataka", read the statement signed by Karnataka Information Technology Minister Priyank Kharge.
According to sources, Apple is set to partner with Taiwanese company Wistron's existing facility at Peenya for assembling the iPhones. Apple making iPhones in India could mean lower prices for the future products, though don't expect the iPhone 8 to be #MadeinIndia so soon.
Getting the price down by local assembly is critical for Apple as the market is very price-sensitive.
A regional minister has stated that Apple will begin manufacturing its iPhone lineup in India starting this spring. Apple's senior executives like Vice President of iPhone operations Priya Balasubramaniam, iPhone Operations Director Dheeraj Chugh and company's senior manager of government affairs (India and the Middle East) Ali Khanafer already met various government officials from center and state.
Talking to Bloomberg News, Kharge had even said that all the iPhones manufactured on the Indian soil will be used to meet the demands of the Indian market. This was seen as a prelude to Apple making iPhones in India. Apple accounts for less than 2 percent of shipments in India, where an estimated 750 million smartphones will be sold by 2020.
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A report from last week stated that Apple had a constructive meeting with the Indian government on the discussion of the plan to open an iPhone production facility in the country.
"Apple Inc., will not come on board immediately until it completes the ongoing negotiations with the government of India", said a top government official.
However, Apple has been trying to convince the Central government for some concessions.
"We are in discussions on a number of things (in India), including retail stores", Apple CEO Tim Cook said in post-earnings call on January 31, "and fully intend to invest significantly in the country and believe it's a great place to be".
Apple is now unable to set up its own branded stores in India, which has a raft of rules to curb the activities of foreign companies.