Even if the United States was to implement 25 percent tariff on iPhones manufactured in India, according to a report of the Global Business Research Initiative (GTRI), the total production costs will still be much lower than the manufacture of equipment in the US.
It comes between a statement by US President Donald Trump, if Apple decides to make it in India, threatens to impose 25 percent tariff on iPhones. However, GTRI reports showed that manufacturing in India is cost -effective despite such duties.
The report broke the current price chain of $ 1,000 (about Rs 83,400) iPhone, including contribution from more than a dozen countries. Apple retains the largest share of about $ 450 (about Rs 37,530) per device through its brand, software and design.
It also said that the US component manufacturer, such as Qualcomm and Broadcom, adds $ 80 (about Rs 6,672), while Taiwan contributes $ 150 (about Rs 12,510) through chip construction. South Korea adds $ 90 (about Rs 7,506) via OLED screen and memory chips, and Japan supplies components of $ 85 (about Rs 7,089), mainly through the camera system. Germany, Vietnam and Malaysia accounts for another $ 45 (about Rs 3,753) through small parts.
GTRI said that China and India, despite being a major player from the iPhone assembly, earn only $ 30 (about Rs 2,502) per device. This is less than 3 percent of the total retail value of an iPhone.
The report argued that the construction of iPhones in India is still economically viable, even if 25 percent of tariffs are implemented.
This is mainly due to a sharp difference in labor costs between the US and the US in India and the US, assembly workers earn approximately $ 230 (about Rs 19,182) per month, while in American states such as California, the cost of labor can be less than $ 2,900 (about Rs 2,41,860) less than minimum wage laws.
As a result, the cost of collecting an iPhone in India is approximately $ 30 (about Rs 2,502), while the same process will cost $ 390 (about Rs 32,526) in the same process. Apart from this, Apple gets the benefit of production-linked incentive (PLI) on iPhone construction in India from the government.
If Apple was to transfer production to the US, the profit per iPhone may fall greatly from $ 450 (about Rs 37,530), until the retail prices increase significantly, only $ 60 (about Rs 5,004) can be.
The GTRI report highlighted how the global price chain and the labor cost differences make India a competitive option for manufacturing even in front of potential American trade restrictions.
(This story is not edited by NDTV employees and auto-generated from a syndicated feed.)
