Apple sets up design, R&D subsidiary in India to broaden local value addition

The company currently has no design base in India, and carries out such operations in countries like the United States, China and Israel.

Under the European Union's landmark Digital Markets Act that took effect last year, Apple must allow rivals and app developers to inter-operate with its own services or risk a fine of as much as 10% of its global annual turnover. (Photo: Reuters)

Even as smartphone maker Apple works on broadening its manufacturing base in India, it has also laid the ground for conducting research and development, and design operations in the country, in a bid to increase local value addition while tapping into India’s skilled engineering base.

The company has set up a wholly-owned subsidiary called Apple Operations India which will “engage in business of procurement management, developing, manufacturing support and other related operations such as processing, undertaking research and development and design relating to science, engineering, technology and applied technology, computer and information technology programming, research, and systems, and related technical support and technical testing and analysis,” as per filings with the Registrar of Companies.

The company currently has no design base in India, and carries out such operations in countries like the United States, China and Israel.

Also Read | Opinion| Why the new Apple Mac mini shifts focus back on simplicity and makes computers fun again

The development comes as the central government has been pushing companies like Apple to conduct research and development and design operations in India as they broaden their assembly and manufacturing base in the country. India is a major design hub for various global electronics companies, particularly those in the semiconductor space. Most smartphone companies are yet to design in India, however.

“The government sees designing and R&D as a major part of local value addition in the electronics sector. As companies move more of their assembly operations to the country, having a design unit will help India in creating a larger space within the research ecosystem. We have a big pool of design engineers in the country because of which all major chip companies carry out R&D here. We expect a similar development for the smartphone sector,” a senior government official said.

Steadily, Apple has been laying the groundwork for having an expansive presence in India, which includes assembly operations on the manufacturing side, and official stores on the consumers’ side. It is also one of the beneficiaries of the government’s production linked incentive (PLI) scheme for mobile phone manufacturing.

It has created a substantial production base in India for iPhones. According to the Economic Survey 2023-24, in the fiscal year 2024, India was responsible for assembling iPhones valued at $14 billion, which represents 14 per cent of Apple’s worldwide production of the device. The phones being made by Apple’s contract manufacturer Foxconn in India are being sold domestically, and also being exported.

Story continues below this ad

India exported smartphones worth around $15 billion in 2023-24, of which iPhones contributed 65 per cent, or about $10 billion – up from $5 billion in the previous year.