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Apple warns India against EU-like USB-C rules for iPhones, says move will hit local production targets

Apple has informed the Indian government about potential disruptions to its local production targets if New Delhi adopts the European Union’s mandate for universal charging ports on existing iPhone models, as per a report by Reuters.

The US tech giant is actively lobbying for an exemption or a delay in implementing the rule.

India is considering the adoption of a European Union regulation that requires smartphones to have a universal USB-C charging port.

Discussions with manufacturers have been ongoing, and the plan is to implement this requirement in India by June 2025, six months after the EU deadline. While other manufacturers, including Samsung, have agreed to comply with India’s plan, Apple is resisting the move.

Apple has long featured a proprietary lightning connector port on its iPhones. The EU estimates that a standardized charging solution could save consumers approximately $271 million (about Rs. 2,259 crore), and India contends that the change will reduce e-waste and benefit users.

According to meeting minutes from a closed-door session on November 28 chaired by India’s IT ministry, Apple urged officials to exempt existing iPhone models from the regulations.

Apple cautioned that failure to do so would hinder the company’s ability to meet production targets set under India’s production-linked incentive (PLI) scheme, a significant initiative of Prime Minister Narendra Modi.

The PLI scheme offers fiscal incentives to electronic manufacturers in India for new investments and incremental phone sales each year. Apple suppliers, such as Foxconn, have extensively used the scheme to expand iPhone manufacturing in the country.

During the meeting, Apple’s regulatory and product compliance executives expressed concerns about meeting PLI targets if the regulations applied to earlier models of mobile phones. However, The IT ministry decided to review Apple’s request and make a decision later.

While Apple did not provide specific details about the production impact in the meeting, analysts believe that India is a crucial growth market for the company.

Analyst Ming-Chi Kuo estimates that 12-14 percent of iPhone production in 2023 will come from India, potentially rising to 25 percent next year.

In terms of market share, Apple currently holds 6 percent of India’s smartphone market, compared to about 2 percent four years ago. Apple suppliers, manufacturing most iPhone 12, 13, 14, and 15 models in India for local sales and exports, have expanded their facilities, according to Counterpoint Research estimates.

However, Apple’s older generation iPhones remain popular in India’s price-conscious market. Prabhu Ram, Head of the Industry Intelligence Group at CyberMedia Research, notes that “Apple’s fortunes in India have primarily been tied to older generation iPhones.”

The EU’s charging port regulations are scheduled to take effect in December 2024, with India aiming for compliance by June 2025. Apple assured Indian officials in the meeting that it can adhere to this timeline if existing models are exempted from the rules but would need an additional 18 months beyond 2024 if they are not.

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