• Around 14 suppliers getting the go-ahead from India after Apple named them as companies whose services it needs to expand its presence in India
Apple Inc. More than a dozen Chinese suppliers of the company are receiving preliminary approval from India to expand in the country, helping the tech giant's efforts to diversify its assembly network beyond China.
AirPods and iPhone assembler Luxshare Precision Industry Co. and a unit of lensmaker Sunny Optical Technology Group Co. are among the companies receiving approval, said the people familiar with the matter, who asked not to be named because the permits are not public. The approval from key Indian ministries is a step towards full approval for expansion in India, the people said, and the companies will still need to find local Indian joint venture partners.
Apple and other US electronics brands are seeking to reduce their reliance on China after trade sanctions and Covid-related production disruptions exposed the risks of too much concentration in one country. The approval signals that India is allowing more Chinese companies to build up in its tech manufacturing sector, even as political tensions between the Asian neighbors intensify.
Prime Minister Narendra Modi has made it a national priority to develop India's manufacturing sector by providing financial incentives and government support for companies' expansion projects. Apple has played a central role in that effort, producing more iPhones in the country than ever before for the latest generation with partners like Hon Hai Precision Industry Co.
Around 14 suppliers are getting the green signal from India, the people said, with Apple naming them as companies whose services it needs to grow its presence in India. While most Apple products are still assembled in China, the company has started making more of them in India through Taiwanese partners in recent years.
Representatives for Luxshare, Sunny Optical, Apple and India's technology ministry did not respond to emails seeking comment.
Cupertino, California-based Apple maintains tight control over its supply chain which includes hundreds of component makers. Some Indian companies, such as the Tata Group, already provide parts to Apple, and the country is pushing to add more local providers to the supply chain to boost and diversify its electronics industry. Joint ventures with Chinese component manufacturers are one way to achieve this.
India has largely cut Chinese companies out of its tech economy after the countries' armies violently clashed along their long-disputed border in 2020, resulting in at least 20 deaths on the Indian side. The incident increased anti-China business sentiment in the country.
Since then, India has banned apps from Alibaba Group Holding Ltd., Tencent Holdings Ltd. and ByteDance Ltd., and has raided, investigated and penalized other Chinese tech companies, from phone makers to fintech service providers. It has tightened rules that forbid companies from bordering countries from entering without government consent, and Chinese companies have missed out on state incentives to tech makers.
Meanwhile, India has been steadily ramping up local assembly of smartphones, allowing Taiwanese makers Hon Hai, Wistron Corp and Pegatron Corp to set up plants. But the absence of critical component manufacturers close to their operations has limited the growth of the domestic industry.
While India is now approving the expansion of many Chinese suppliers in the country, some are still being rejected, the people said. Apple presented a list of about 17 suppliers to Indian authorities, and some of them were turned down, at least one because of direct ties to the Chinese government, one of the people said.
Han's Laser Technology Industry Group Company and Shenzhen Youto Packaging Technology Company are being approved, the people said.
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