Apple has been looking to increase its market share in India in recent years. The company has been taking steps to make its products more affordable for Indian consumers and to expand its retail presence in the country.
The Indian government’s recent decision to relax foreign direct investment (FDI) rules for single-brand retail companies like Apple has also been seen as a positive development for the company.
Additionally, Apple has started manufacturing its iPhone models in India, which could help reduce costs and increase the availability of its products in the country. However, Apple still faces competition from other smartphone manufacturers in India, and it remains to be seen how well the company will perform in the market in the long term.
More than a dozen of Apple Inc.’s Chinese suppliers have been granted preliminary permission to expand in India, assisting the tech giant in its efforts to diversify its assembly network beyond China.
Luxshare Precision Industry Co., which makes AirPods and iPhones, and a unit of lensmaker Sunny Optical Technology Group Co. are among the companies that have received approval, according to people familiar with the matter who asked not to be identified because the permits aren’t public.
According to the people, the clearances from key Indian ministries are a step toward full approval for expansion in India, and the companies will still be required to find local Indian joint venture partners.
Apple and other US electronics companies are attempting to reduce their reliance on China, following trade restrictions and COVID-related production disruptions that highlighted the risks of too much concentration in one country.
The clearances indicate that India is allowing more Chinese companies to enter its tech manufacturing sector, despite rising political tensions between the Asian neighbors.
Growing India’s manufacturing sector is a national priority for Prime Minister Narendra Modi, who has offered financial incentives and government support for business expansion plans.
With partners like Hon Hai Precision Industry Co. producing more iPhones in the nation for the most recent generation than ever before, Apple has played a key role in that effort.
According to the people, Apple has named about 14 suppliers as businesses whose services it needs to increase its presence in India, and they have received the go-ahead from India.
Although Apple still assembles the vast majority of its products in China, it has recently begun producing more of them in India with the help of Taiwanese partners.
Emails requesting comments from Luxshare, Sunny Optical, Apple, and India’s technology ministry went unanswered.
Based in Cupertino, California Apple has tight control over the hundreds of component manufacturers that make up its supply chain. To grow and diversify its electronics industry, India is pushing 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 ventures with Chinese component manufacturers.
After the nations’ troops violently clashed on their long-disputed border in 2020, which resulted in at least 20 deaths on the Indian side, India largely cut off Chinese companies from its tech economy. The incident caused business hostility toward China to soar across the nation.
Since then, India has cracked down on a variety of Chinese tech firms, from phone manufacturers to fintech service providers, by raiding, investigating, and banning the apps of Alibaba Group Holding Ltd., Tencent Holdings Ltd., and ByteDance Ltd.
It has tightened regulations that prevent bordering country businesses from entering without permission from the government, and Chinese businesses have been left out of state incentives for tech manufacturers.
In the meantime, India has been gradually increasing local smartphone assembly, enabling the establishment of factories by Taiwanese producers Hon Hai, Wistron Corp., and Pegatron Corp. But the growth of the domestic industry has been constrained by the lack of key component manufacturers nearby.
Even though India is currently approving the expansion of several Chinese suppliers there, people claim that some are still being turned down. According to one of the people, Apple sent a list of about 17 suppliers to Indian authorities, and some of them were rejected, including at least one because of ties to the Chinese government.
The companies being cleared include Shenzhen YUTO Packaging Technology Co. and Han’s Laser Technology Industry Group Co.
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