Big boost to Apple’s Make in India plans, Chinese component makers get clearance to expand in India

Big boost to Apple’s Make in India plans, Chinese component makers get clearance to expand in India

Some of Apple’s biggest component manufacturers will now set up shop in India. This is a major boost for Make in India, as well as Apple, who plan to make at least half of all iPhones sold globally, at its Indian facilities.

Apple’s plans to make at least half of all iPhones sold globally in India by 2027 got a major boost this week. More than a dozen of Apple’s Chinese suppliers have been given preliminary approval by the government of India to establish their businesses here, assisting the Cupertino-based tech giant in its quest to expand the geographic scope of its manufacturing network outside China.

A unit of lens manufacturer Sunny Optical Technology Group and AirPods and iPhone assembly company Luxshare Precision Industry has been approved, according to people with knowledge of the situation who asked to remain anonymous since the licences are private.

The companies would probably still be needed to locate regional Indian joint venture partners, the sources said, but the permissions from important Indian ministries are a step toward complete authorisation for expansion in India.

After trade restrictions and manufacturing bottlenecks associated with Covid exposed the dangers of excessive concentration in one nation, Apple and other US electronics manufacturers are attempting to minimise their reliance on China. The clearances show that, despite rising political tensions between the Asian neighbours, India is allowing more Chinese firms to expand its electronics manufacturing industry.

According to several reports, Apple selected about 14 vendors whose services it needed to expand its footprint in India and they are now getting the go-ahead from India. Although Apple still assembles the great majority of its devices in China, it has recently begun producing more of them in India with the help of Taiwanese partners.

Apple has tight control over the hundreds of component manufacturers that make up its supply chain. In order to grow and diversify its electronics sector, India is seeking to include more local suppliers in the supply chain. Some Indian businesses, like the Tata Group, already supply Apple with parts. This can be accomplished through joint partnerships with Chinese component manufacturers.

After the nations’ armies brutally battled on their long-disputed border in 2020, which resulted in at least 20 deaths on the Indian side, India mainly blocked out Chinese enterprises from its digital industry. The episode caused corporate hostility toward China to skyrocket across the nation.

Since then, India has blacklisted the applications of Tencent Holdings, ByteDance, Alibaba Group Holdings, which owns Post, as well as other Chinese IT firms including phone manufacturers and banking service providers. It has strengthened regulations that prevent neighbouring country businesses from entering without permission from the government, and Chinese businesses have been left out of governmental incentives for IT firms.

Meanwhile, India has been gradually increasing domestic smartphone assembly, enabling the establishment of factories by Taiwanese producers Hon Hai Precision Industry, Wistron, and Pegatron. But the expansion of the local sector has been constrained by the lack of key component manufacturers nearby.

Even though India is now permitting the growth of some Chinese suppliers there, the persons claimed that others are still being turned down. According to one of the persons, Apple sent a list of roughly 17 suppliers to Indian authorities, and several of them were rejected, including at least one because of links to the Chinese government.

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