The Modi government has been pushing for local manufacturing in a big way as the Centre plans to make India a manufacturing hub after over-reliance on China exposed weaknesses of the supply chains amid the Covid-19 pandemic.
Now, despite the political tensions between India and China, the Centre has given initial clearance to 14 Chinese suppliers to help Apple expand in the country. Even as Apple has been seeking to diversify, it still needs some Chinese companies that it said are important for the tech giant to boost its manufacturing in India.
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Bloomberg reported, quoting sources who did not want to be named because the permits aren’t public, that AirPods and iPhone assembler Luxshare Precision Industry Co. and a unit of lensmaker Sunny Optical Technology Group Co. are among the companies gaining approval.
The report said that Apple had submitted a list of 17 suppliers to the Indian authorities and at least one of them was turned down for having direct ties with the Chinese government. Few others were also rejected permits for reasons that were not disclosed in the report.
The clearances to Chinese suppliers will build Apple’s foundation in India and further its expansion. These companies will most likely be required to enter into joint ventures with local partners, people familiar with the matter told Bloomberg.
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The permits are significant considering India’s tensions with its neighbor and it indicates that India is willing to set aside differences as long as the Chinese companies help build India’s tech manufacturing sector, conditions applied.
Following the Galwan faceoff in 2020, India and China stopped dealing in the tech space as the Modi government banned several Chinese apps citing national security risks.
Meanwhile, Apple has been trying to diversify its supply chains, and India has been roping in more local producers to boost and diversify its electronics industry. Some Indian companies like the Tata group already provides Apple with parts.
