Apple is to start making iPhones in the southern Indian state of Karnataka, the state's government has said.

It said it welcomed a proposal from the tech giant to begin initial manufacturing operations in the state, whose capital is the tech hub Bangalore. Apple has 2% of India's mobile phone market, well behind rival Samsung.

However, although Apple said this week it is keen to "invest significantly" in India, it has not confirmed any plans. Despite the low percentage of sales, Apple has almost half of the market for premium phones, which start at around $450 an item, and its sales are growing fast. Apple has held a series of meetings with government representatives at both state and national level and is understood to be pressing for concessions before going ahead with such a move.

Priyank Kharge, minister of information technology and biotechnology in Karnataka, told the AFP news agency: "We have an understanding with Apple and we expect them to start manufacturing in Karnataka by the end of April." Reports said the plant is being set up by Taiwanese manufacturing company Wistron Corp. Apple's biggest manufacturing partner is Taiwanese giant Foxconn, which runs the biggest iPhone factory in the world in China.

Rising sales

Apple is currently unable to set up its own branded stores in India, which has a raft of rules to curb the activities of foreign companies. For it to be able to sell direct to customers in India, Apple would have to source 30% of the components of its products locally. Earlier this week, Apple reported its first rise in sales in nine months after strong Christmas sales of the iPhone 7.

The firm had suffered three quarters in a row of falling revenues as mounting competition, particularly from Chinese rivals, hit sales of the iPhone.

Source: BBC Posted on 03/02/17