India's manufacturing sector is poised for a significant boost as Apple is reportedly planning to establish two mega factories in the country, potentially creating one lakh jobs, according to Chief Economic Advisor (CEA) Nageswaran. This move aligns with the Indian government's "Make in India" initiative, which seeks to transform the nation into a global manufacturing hub.

While specific details about the locations and timelines of these factories remain undisclosed, this development signifies a major step in Apple's strategy to diversify its supply chain and reduce its reliance on China. The Economic Survey 2023-24 highlighted that India's ability to attract multinational investments relocating from China, as demonstrated by Apple's expanding operations, will be crucial in strengthening its position in global value chains.

CEA Nageswaran has been a proponent of attracting Chinese manufacturers, especially those already supplying to Apple, to set up facilities in India. He emphasized that economic pragmatism should take precedence, as India's industrial growth necessitates a broader manufacturing base and integration into global supply chains. Nageswaran believes that if India can effectively manage Apple's ecosystem, it can manage others as well.

Foxconn, a major Apple supplier, has already been expanding its manufacturing presence in India. The company is developing a 300-acre facility in Bengaluru, which is expected to become its second-largest after China. Additionally, Foxconn has established a new unit in Hyderabad for AirPods production, further diversifying Apple's product range manufactured in India. Foxconn intends to produce 25-30 million iPhones at its Indian facilities this year, more than double the previous year's output.

Other Apple suppliers, such as Pegatron, are also eyeing India to set up factories. Pegatron has registered its India subsidiary in Chennai and is reportedly in discussions with multiple state governments to acquire land for establishing its manufacturing units.

The expansion of Apple's manufacturing in India is expected to have several positive impacts, including:

• Job Creation: The establishment of mega factories is projected to generate one lakh jobs, providing employment opportunities for India's growing workforce.
• Economic Growth: Increased manufacturing activity will contribute to India's GDP growth and boost the country's economy.
• Export Promotion: A significant portion of the manufactured goods is expected to be exported, enhancing India's export competitiveness.
• Technological Advancement: Collaboration with global manufacturers like Apple can facilitate technology transfer and enhance India's manufacturing capabilities.
• Supply Chain Integration: Attracting component makers and other suppliers to India will strengthen the country's supply chains and reduce its dependence on imports.

To further incentivize manufacturing in India, the government has implemented the Production Linked Incentive (PLI) scheme, which provides financial incentives to companies for increasing domestic production. This scheme has played a crucial role in attracting investments from Apple and its suppliers.

In conclusion, Apple's plan to build two mega factories in India is a significant development that underscores the country's growing importance as a global manufacturing destination. This move is expected to create numerous jobs, boost economic growth, and strengthen India's position in the global value chain. The government's proactive policies and initiatives, such as the "Make in India" program and the PLI scheme, have been instrumental in attracting investments and promoting manufacturing in the country.