Around 14 suppliers are getting licences from India after Apple has identified them as companies that need to expand their presence in India.
More than a dozen Chinese suppliers to Apple Inc. received initial approval from India to expand in India, helping the tech giant diversify its assembly network outside of China.
AirPods and iPhone assembler Luxshare Precision Industry Co. and lens manufacturer Sunny Optical Technology Group Co. People familiar with the matter said they had asked not to be named because the permits would not be made public. Approval from key Indian ministries is a step towards full approval for expansion in India, and the company will still need to find a local Indian joint venture partner, people say.
Apple and other US electronics brands are seeking to reduce their reliance on China after Covid-related trade restrictions and production shutdowns expose them to the risk of over-concentration in one country. The permit is a sign that India is allowing more Chinese firms to develop its tech manufacturing sector despite rising political tensions among its Asian neighbours.
Prime Minister Narendra Modi has made the development of India’s manufacturing sector a national priority by providing financial incentives and government support for expansion projects. Apple has played a central role in this effort, working with partners such as Hon Hai Precision Industry Co. to produce the latest generation of iPhone in the country.
Around 14 suppliers have been licensed from India after Apple has identified them as companies that need to expand their presence in India. Most Apple products are still assembled in China, but in recent years the company has started making more products in India through its Taiwanese partners.
Representatives from Luxshare, Sunny Optical, Apple and India’s tech department did not respond to emails seeking comment. Cupertino, Calif. Apple tightly controls its supply chain, which includes hundreds of component manufacturers. Some Indian companies, such as Tata Group, already supply components to Apple and plan to add more local suppliers to their supply chain to boost and diversify the electronics industry. One way to achieve this is through joint ventures with Chinese component manufacturers.
India has largely cut off Chinese companies from the tech economy after violent clashes between Chinese troops on the long-strife border that left at least 20 deaths on the Indian side in 2020. The incident contributed to a sharp rise in anti-Chinese business sentiment in the country.
India has since banned the applications of Alibaba Group Holding Ltd., Tencent Holdings Ltd. and ByteDance Ltd., raided, investigated and punished many other Chinese tech companies, from phone manufacturers to fintech service providers. He tightened rules barring companies from border countries from entering without government consent, while Chinese firms missed out on government incentives for tech producers.
Meanwhile, India has steadily increased local assembly of smartphones, with Taiwanese manufacturers Hon Hai and Wistron Corp., and Pegatron Corp. open factory. However, the lack of important component manufacturers near production limited the growth of the domestic industry.
India is now approving the expansion of several Chinese suppliers in India, but some are still being rejected, people say. According to sources, Apple has submitted a list of about 17 suppliers to Indian authorities, some of which were rejected because of their direct ties to the Chinese government.
According to the people, companies doing the cleaning include Han’s Laser Technology Industry Group Co. and Shenzhen YUTO Packaging Technology Co.