Apple to bring Chinese suppliers to boost production in India

Apple to bring Chinese suppliers to boost production in India

While the vast majority of Apple products are still assembled in China, the company has in recent years started making more of them in India

A number of Chinese suppliers of Apple Inc. received initial clearance by Indian government to expand in the country, Bloomberg reported, citing people familiar with the matter. The Chinese suppliers, however, will require to find local Indian joint venture partners as per manufacturing rules put in place by New Delhi. While India is reportedly approving multiple Chinese suppliers, many were rejected, the report said.

Apple submitted a list of about 17 suppliers to Indian authorities, and a few of them were turned down, at least one because of direct ties to the Chinese government, one of the people familiar with the matter told Bloomberg.

The clearance by New Delhi for Chinese suppliers along with home-grown venture partners will help Apple to diversify its manufacturing base away from China.

Who all have received clearance?

AirPods and iPhone assembler Guangdong-based Luxshare Precision Industry Co. and a unit of Ningbo, China-based Sunny Optical Technology Group Co. are among the companies gaining approval, people familiar with the matter were quoted as saying by Bloomberg. 

About 14 suppliers are receiving approval from India, after Apple named them as companies whose services it needs to increase its presence in India, Bloomberg further quoted the people as saying. 

Apple to bring Chinese suppliers to boost production in India
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While the vast majority of Apple products are still assembled in China, the company has in recent years started making more of them in India through Taiwanese partners.

Apple and other US electronics brands are seeking to reduce their reliance on China after trade restrictions and Covid-related production disruptions exposed the risks of dependence on the country. 

What does it mean?

India's Prime Minister Narendra Modi in his second term has focused on growing India's manufacturing sector, providing Production Linked Incentives to mass manufacturers establishing their base in India.

Mumbai-based Tea to airplane conglomerate Tata Group, already provide Apple with parts, and India is pushing to add more local providers into the supply chain to boost and diversify its electronics industry. 

India has cut off Chinese companies from its smartphone economy after violent clash between two countries' troops along the Line of Actual Control (LAC) in northernmost India's eastern Ladakh in June 2020.

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