People with knowledge of the situation informed ET that Apple is searching for new suppliers who can supply essential components to its contract manufacturers in India. These suppliers might be South Korean, Japanese, or Indian.
This is a result of the government’s delayed licences for the import of batteries, camera lenses, chargers, and other equipment needed to produce the company’s premium iPhones and iPads in India from current suppliers, most of whom are Chinese, they claimed.
Approximately seventeen Chinese suppliers of parts for Apple products submitted applications to the government in January in order to establish production plants in India.
Initial clearance was given to 14. Of them, six have informed the government that they are no longer interested in producing in India, and four have had their applications pending indefinitely. At this time, ET is unable to independently confirm the current state of the other four companies.
“The January approvals were merely preliminary approvals.” National security is a concern as well, since the majority of these businesses are of Chinese descent. Such permissions need to be granted with caution. Expert committees make decisions on environmental clearances, which are state-related, according to a senior government official.
Among the 14 are Sunny Optical Technology Group, Han’s Laser Technology Industry Group, Luxshare-ICT, a manufacturer of airpods, and ON Semiconductor Shenzhen China, a producer of capacitor chips.
According to an additional source close to the development, Luxshare-ICT relocated its production facility to Vietnam as a result of the delays in clearances.
But according to a different government official, “it is incorrect to state that we have rejected any of these companies’ applications.” All government approvals must be granted only after carefully weighing all available options.
According to these insiders, Apple is currently searching for suppliers that can establish “just-in-time” supply chains in India to speed up local manufacture, as imports have been delayed due to multiple approvals pending at both the federal and state levels.
Apple and the aforementioned suppliers did not respond to emails.
Geographical Aspects
Due to the ongoing tensions along the India-China border, industry insiders believe that since the majority of Apple’s component suppliers are based in China, it is unlikely that they would receive government permissions right away.
Even after receiving permissions, some of these businesses—which offer essential components but are smaller globally—are unlikely to accept the chance of investing in a hostile nation. The dangers have to have been reassessed, according to a top industry leader.
According to one of the persons named, Apple was pushed by the delays to start exploratory level discussions with businesses in South Korea, Japan, Taiwan, India, and other countries for essential components like cables, casing units, chargers, batteries, and other parts.
IT Minister Ashwini Vaishnaw announced on Monday that Japan-based TDK will build a new plant in Haryana to produce lithium-ion battery cells.
Apple has been pushing for production in India more vehemently over the years as it seeks to diversify its supply chain beyond China.
As previously revealed by ET, Tata Electronics—currently Apple’s sole Indian supplier—plans to nearly increase the size of its iPhone case manufacturing facility.
