Apple in talks with Indian government to manufacture iPhones locally

Apple is currently in talks with India's government to begin manufacturing products locally, as the US tech giant aims to increase its market foothold in the world's third-biggest smartphone market.

According to two senior government officials speaking to the WSJ on condition of anonymity, Apple last month sent a letter to the Indian government, outlining its plans and seeking financial incentives which prompted a meeting between Trade Ministry authorities to discuss the matter.

India is currently the world's third-biggest smartphone market, behind China and the U.S., with Gartner projecting smartphone shipments in the country to reach 139 million this year. However, the vast majority of the devices sold in India will run Android and cost less than $150, according to Gartner. Currently, iPhones account for less than 5 percent of Indian smartphone sales.

Apple is already investing more and more in the South Asian market, but local manufacturing would be the next logical step to increase its presence in the blooming market. Local manufacturing would allow Apple to open its own retail stores in India, as foreign companies are required to locally source at least 30 percent of the materials used for their products. Furthermore, Foxconn, the Chinese manufacturer that makes various Apple devices such as iPhones and iPads, owns a manufacturing facility in Southern India.

Some foreign smartphone makers, such as Samsung and Xiaomi, are already manufacturing locally for the Indian market. Recently OnePlus also revealed plans to begin manufacturing future devices in India and open more services and a retail location.

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