Hello. Apple announced the iPhone 16 today, with Pro and Pro Max models being built in India for the first time ever. We’ll tell you what you need to know, and then close with Gupshup, a round-up of the most important headlines.

BTW: Speaking of Apple, numerous U.S. technology companies are run by Indian-origin CEOs.  Can you name all of them? (Answer at bottom)

Markets

Read here for an appendix on the above.

Apple Goes Indian

Just a few hours ago, Apple released its latest iPhone 16 Pro model, which will be partially manufactured in India for the first time ever. This is a major step towards the Cupertino smartphone behemoth's goal to have 25 percent of iPhones manufactured in India in the next four years and a win for Indian leaders who want their nation to become a global leader in electronics production.

In 2017, Apple began manufacturing older versions of iPhones in India for local consumers in an attempt to diversify its supply chain from China. This effort was exacerbated during COVID-19, when a Chinese factor spontaneously seized production, causing major delays in iPhone deliveries to customers during the 2022 holiday season. Apple is hardly alone in diversifying away from China; Microsoft and Amazon have moved some of the Xbox and Fire TV manufacturing to India and Vietnam, respectively. 

Another incentive to shift manufacturing to India is the ongoing freeze in China-India relations, stemming from a 2020 border dispute. This conflict led India to ban several Chinese companies, including TikTok, from operating in the country. India also imposes high tariffs on Chinese electronics and technology products. Despite India’s ambitions to integrate into the global manufacturing supply chain, the unresolved border tensions make normalization of relations unlikely. As a result, tariffs can cause Chinese-manufactured products, like the iPhone, to be more expensive in India than in the U.S., posing challenges for companies like Apple in reaching India’s expanding consumer market. Apple’s India sales grew 33 percent year-over-year in the 12 months ending March 2024 to $8 billion, making it a promising growth opportunity for the American technology company.

In 2023, Foxconn announced a $1.5 billion investment in the southern Indian state of Tamil Nadu, a $600 million plant in the state of Karnataka, and a $500 million plant in Telangana state. The state-of-the-art factories allow Apple to build iPhone 16 Pro and Pro Max models in the country for the first time ever. Foxconn, a Taiwanese electronics manufacturer, is a long-time supplier of Apple, and now makes 67 percent of the iPhones built in India.

Foxconn’s investments ushered in a massive change in Apple’s supply chain. Bloomberg reported in April 2024 that Apple doubled its production to $14 billion worth of iPhones built in the country in the most recent fiscal year compared to the year before. Now, 1 in 7 iPhones sold globally are made in India.

Apple’s future in India looks optimistic. Indian conglomerate Tata Group, the first domestic manufacturer of iPhones, has promised to make India’s largest factor for producing Apple products. At the same time, Indian leaders have put their money where their mouth is by offering generous subsidies to Apple’s manufacturing partners to build plants in the country. Apple launched its first retail stores in India in 2023, and despite holding only 6% of the Indian smartphone market, CEO Tim Cook called India a "huge opportunity" in a June 2023 interview with CNBC.

Macro

India’s foreign direct investment rose 26.4 percent in April to June 2024, year-over-year (India Briefing)

• 80 percent of inflows went into manufacturing

• Unsurprisingly, Maharashtra (home to Mumbai) led the country in FDI inflows

RBI likely intervened last week to protect rupee after weak U.S. jobs report

• Weaker U.S. jobs report caused a flight to safety, moving money out of emerging markets towards U.S. treasury bonds, weakening Asian currencies including the rupee

• The 1-month non-deliverable forward indicates rupee at 83.97-83.98 to the U.S. dollar, higher than the 83.9475 last week

• The rupee has hovered just under 84 rupees/dollar for all of 2024

New company registrations fall 4.1 percent in August (ET)

• Company registrations declined 11 percent in July

Equities

Nifty Public Sector Banks index hit a seven-month low last week (BBG)

• Goldman Sachs downgraded the State Bank of India

• While PSB shares have been lifted by increases in profit, analysts are concerned that credit costs will increase delinquencies.

Indian equities dipped Friday after U.S. slowdown concerns after weak jobs report released Friday (Outlook Business)

• BSE Sensex fell 169.57 points or 0.21 percent to 81,014.36

• NSE Nifty50 fell 54 points or 0.22 percent to 24,798.15

RBI rejects Canara Bank’s plan to open a credit card subsidiary (ET)

• Canara Bank is state-run and publicly trades under NSE ticker CANBK

• Canara Bank opened a credit card business a few years ago, while major Indian banks broadly looked to cash in on the growing unsecured credit card sector

• Canara hoped a subsidiary to provide additional services to its credit card customers would help it boost the business — it is unclear right now why RBI rejected the opening of the subsidiary

Policy

BJP promises 500,000 jobs in Jammu-Kashmir ahead of local elections (BBG)

• BJP also promises to give laptops to students, and boost tourism

• Opposition leader Rahul Gandhi has promised to restore statehood to J-K if Indian National Congress party wins power

Modi visits Singapore to secure bilateral agreements (CNBC)

• Singapore is India’s sixth-largest trading partner

• Indian investment in Singapore hit $33.3 billion in 2022, as India looks to partner with Singaporean semiconductor companies to shore up its own domestic industry

• India also plays a strategic geopolitical role for Singapore, as it looks to diversify supply chains away from China

Oh, and the list of Indian CEOs of U.S. tech companies (at least $1 billion in size) is Sundar Pichai (Alphabet), Satya Nadella (Microsoft), Neal Mohan (YouTube), Nikesh Arora (Palo Alto Networks), Jayshree Ullal (Arista Networks), George Kurian (NetApp), Reshma Kewalramani (Vertex Pharmaceuticals) Shantanu Narayen (Adobe), Arvind Krishna (IBM), Vasant Narasimhan (Novartis), Sanjay Mehrotra (Micron Technology), Vimal Kapur (Honeywell), Revathi Advaithi (Flex), Niraj Shah (Wayfair), Anirudh Devgan (Cadence Design Systems), Ravi Kumar S (Cognizant), Jay Chaudhry (Zscaler), Anjali Sud (Tubi), and …

Over 100 of the Fortune 500 CEOs are of Indian origin, so let’s just stop this list here.

See you next week.

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

1 USD = 83.90 Indian Rupee