The companies have to increase their production of smartphones in the country to benefit, according to a Tuesday statement from India’s Ministry of Electronics and Information and Technology. They will get incentives worth between 4% and 6% of the sales of certain products made in India over a period of 5 years.
The incentive program is expected to bring 110 billion rupees ($1.5 billion) worth of investment to the country’s electronics manufacturing industry, according to the government statement.
Apple and Samsung “together account for nearly 60% of global sales revenue of mobile phones,” the Ministry of Electronics and Information and Technology said, adding that the program was expected to “increase their manufacturing base manifold in the country.”
For Apple, the nod from regulators for its suppliers could provide a tailwind for the company’s India ambitions.
Part of the problem is that many of the company’s products are seen as prohibitively expensive for most Indians.
The government’s new incentives could mean that “more of the local India iPhones sales is catered by the locally produced iPhones, which would bring down the cost,” said IDC senior research manager Kiranjeet Kaur. She noted that so far, iPhones made in India are older generation models, with new flagship phones still coming from China.
The “region could translate into some surprising iPhone units upside as Apple heads into this key launch period,” Ives wrote in a note on Wednesday.
— Rishi Iyengar contributed to this report.