The country's Make in India program encourages foreign companies to build products locally in exchange for incentives, but Apple previously tried to take advantage of the local mobile sales boom by simply bringing used phones in the country.
The report also suggests Apple is pulling back on production of the iPhone SE, iPhone 7 and iPhone 7 Plus as manufacturing starts to shift to the newer device.
By April 2017, Apple will be putting together phones manufactured by Taiwan's Wistron Corp.in Bengaluru. The Cupertino, Calif. -based company is said to have put forward a long list of demands in negotiations with India's federal government, including a 15-year tax holiday to import components and equipment.
The start of iPhone assembly in India will begin after Apple formats their plan for the Indian market. Apple now sells iPhones and other products in India through local distributors, but it lags far behind Samsung and Chinese brands such as Xiaomi, Oppo and Lenovo in terms of market share. The tech giant will be assembling units of its beloved handset in India in hopes to topple the nation's leading smartphone brand, Samsung.
Chief Executive Officer Tim Cook has made it abundantly clear that India "is the place to be".
Apple neither confirmed nor denied the minster's remarks, but said last week that it has been talking to India's government about "expanding" local operations.
Apple has been asking for sops from the Indian government to start making iPhones in the country and as well as its own retail chain.
Apple sees India as a massive potential market for its devices, the company has been working with the India government on a deal that would allow them to manufacture their handsets in the country.
In terms of pixel resolution, Apple Inc. will retain its 326 PPI (pixel per inch) Retina Display introduced in iPhone 4. The company's request reportedly says the smartphones will be refurbished in India and will adhere to all regulations imposed upon the sale of smartphones within the country.
iPhone sales in India were up by 50 percent during the fiscal year 2016 compared to the previous year.
The company collects a large number of used iPhones through upgrade schemes in the USA and around the world every time it introduces a new device, some of which are broken down into their component bits and others refurbished and sold.
While Apple's services revenue hit $7.2 billion in the first quarter, 18% higher than a year earlier, it's still only 9% of the company's overall revenue, or 100 basis points higher than a year earlier.