Tech

Apple’s manufacturing operations in India are expected to receive a boost as 14 Chinese suppliers are licensed


More than a dozen Apple Chinese suppliers are getting initial approval from India to expand in the country, helping the tech giant’s efforts to diversify its assembly network outside of China.

AirPods and Iphone assembler Luxshare Precision and a division of lens maker Sunny Quang were among the approved companies, people familiar with the matter said, requesting anonymity because the license was not made public. The source said that the approval of key Indian ministries is a step towards full approval for the expansion in India and companies will still likely be required to find local joint venture partners. of India.

Apple and other US electronics brands are looking to reduce their reliance on China after COVID-related trade restrictions and production disruptions pose risks of focusing too much on one country. . The clearance signals that India is allowing more Chinese companies to join the build-up of its tech manufacturing sector, even as political tensions between its Asian neighbors increase.

Prime minister Narendra Modi has given national priority to developing India’s manufacturing sector, providing financial incentives and government support to companies’ expansion projects. Apple has played a central role in that effort, with partners like Hon Hai Precision producing more of the latest-generation iPhones in the country than ever before.

About 14 vendors are getting the green light from India, after Apple called them companies whose services it needs to boost its presence in India, the source said. While the majority of Apple products are still assembled in China, the company has in recent years begun manufacturing more products in India through Taiwanese partners.

Representatives for Luxshare, Sunny Optical, Apple and India’s technology ministry did not respond to emails requesting comment.

Apple, headquartered in Cupertino, California, has tight control over its supply chain that includes hundreds of component manufacturers. Some Indian companies, such as Tata Corporation, already supply components to Apple, and the country is pushing more local suppliers into the supply chain to boost and diversify the electronics industry. his death. Joint ventures with Chinese component manufacturers are one way to get there.

India has largely cut off Chinese companies from its tech economy after countries’ militaries violently clashed on a protracted disputed border in 2020, resulting in at least 20 deaths in India. Indian side. The incident has sent anti-China business sentiment soaring in the country.

Since then, India has banned apps of alibaba, Tencentand ByteDance, and raided, probed, and punished a host of other Chinese tech companies, from phone makers to fintech service providers. It tightened rules barring companies from bordering countries from entering without government consent, and Chinese companies missed out on state incentives for manufacturers. technology.

Meanwhile, India is gradually ramping up domestic smartphone assembly, allowing Taiwanese manufacturers Hon Hai, Wistron and Pegatron to set up factories. But the absence of key component makers close to their operations has limited the growth of the domestic industry.

While India is currently approving the expansion of some Chinese suppliers in the country, some are still being rejected, the source said. Apple has submitted a list of about 17 suppliers to Indian authorities, and several of them have been rejected, at least one for having direct ties to the Chinese government, a source said.

People said Han’s Laser Technology Industry Group and Shenzhen’s YUTO Packaging Technology were among those removed.

© 2023 Bloomberg LP


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