If Apple shifts manufacturing to the U.S., India faces a major economic and employment blow

International News: US President Donald Trump has appealed to Apple's CEO Tim Cook to remove its manufacturing unit from India and establish it in the US. However, it has been clarified by Apple on the issue that production will continue in India at present. But in the meantime, an important report of Global Trade Research Initiative (GTRI) has come out, which suggests that if Apple shifted to his manufacturing America, it will have to bear a big financial loss. Also, a sword can hang on the jobs of thousands of people in India.

Only $30 in India, $1000 iphone sold in America

According to the GTRI report, Apple costs only US $ 30 per unit from the final assembly of the iPhone in India. This amount decreases further after receiving the subsidy of the PLI scheme related to production. The same iPhone is sold in America for about $ 1000. That is, India's share in the entire value chain is just around 3%.

According to GTRI founder Ajay Srivastava, India is currently the center of the iPhone final assembly. If Apple shifted this assembly to America, it will directly affect the entry-level employees working in India. This can lead to large scale jobs.

Is India ready to deal with this shock?

However, Ajay Srivastava believes that India has many options to deal with this possible crisis. India can create new employment opportunities by taking its move in areas such as semiconductor, battery technology and display manufacturing. The government is already taking concrete steps towards chip construction and becoming self -sufficient in the electronics sector.

Value chain breakdown of an iPhone

In the report, the price of $ 1000 of an iPhone is divided according to the contribution of different countries:

• 450 dollar: Physical device cost (material and assembly)
• 150 dollar: Taiwan for chip manufacturing
• 90 Dollar : OLED to South Korea and Memory Components
• 85 dollars : Japan for camera unit
• 80 dollars : Companies like America's Qualcomm and Broadcom
• 45 dollars : for the technical contribution of Germany, Vietnam and Malaysia
• 30 dollars : to India and China, who do final assembly

The figures clearly show that Apple's profit comes not just from technology or design, but from a global value chain designed in collaboration around the world. India, despite being an important part of this value chain, still receives very few parts.
 
India may have to face double hit

If Apple shifts manufacturing in the US, India may have to face double hit - on the one hand will affect the foreign earnings of millions of dollars, on the other hand, thousands of people in the electronics sector will be in danger. In such a situation, it is important for India not to keep his contribution to the Value chain only limited to the assembly, but high-tech components and R&D.