Apple gets a boost in India as Chinese suppliers get government clearance Missed-news

More than a dozen of Apple Inc.’s Chinese suppliers are receiving initial clearance 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 lens maker Sunny Optical Technology Group Co. are among the companies that won approval, said people familiar with the matter, who asked not to be named because the permits were not available. they are public. The clearances from key Indian ministries are a step towards full approval for expansion in India, and the companies will likely still need to find local Indian joint venture partners, the people said.

Apple and other US electronics brands are seeking to reduce their reliance on China after Covid-related trade restrictions and production disruptions exposed the risks of excessive concentration in one country. The authorizations indicate that India is allowing more Chinese companies to develop its technology manufacturing sector, even as political tensions between the Asian neighbors have intensified.

Prime Minister Narendra Modi has made growing India’s manufacturing sector a national priority, providing financial incentives and government support for company expansion projects. Apple has played a central role in that effort, with partners like Hon Hai Precision Industry Co. producing more iPhones in the country for the latest generation than ever before.

About 14 vendors are getting the green light from India, after Apple named them as companies whose services it needs to grow its presence in India, the people said. While the vast majority of Apple products are still assembled in China, the company has in recent years begun manufacturing more in India through Taiwanese partners.

Representatives for Luxshare, Sunny Optical, Apple and India’s Ministry of Technology did not respond to emails seeking comment.

Cupertino, California-based Apple exercises tight control over its supply chain that includes hundreds of component manufacturers. Some Indian companies, such as the Tata Group, already provide parts to Apple, and the country is pushing to add more local suppliers to the supply chain to boost and diversify its electronics industry. Joint ventures with Chinese component manufacturers are one way to achieve this.

India largely cut Chinese companies out of its tech economy after the countries’ troops clashed violently on its long-disputed border in 2020, leading to at least 20 deaths on the Indian side. The incident triggered anti-China business sentiment in the country.

India has since banned apps from Alibaba Group Holding Ltd., Tencent Holdings Ltd. and ByteDance Ltd., and raided, investigated and penalized a host of other Chinese tech companies, from phone makers to fintech service providers. It has tightened rules barring companies from neighboring countries from entering without government consent, and Chinese companies have missed out on state incentives for technology makers.

Meanwhile, India has been steadily increasing local smartphone assembly, allowing Taiwanese manufacturers Hon Hai, Wistron Corp. and Pegatron Corp. to set up plants. But the absence of crucial component manufacturers near its operations has limited the growth of the domestic industry.

While India is now approving a number of Chinese suppliers to expand into the country, some are still being turned away, the people said. Apple submitted a list of about 17 suppliers to Indian authorities and some of them were turned down, at least one because of its direct ties to the Chinese government, one of the people said.

Han’s Laser Technology Industry Group Co. and Shenzhen YUTO Packaging Technology Co. are among those being cleared, the people said.

–With assistance from Debby Wu, Gao Yuan, Sudhi Ranjan Sen, and Adrija Chatterjee.

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