Apple gets a boost in India as Chinese suppliers given clearance

More than a dozen of Apple Inc.’s Chinese suppliers are receiving initial clearance by 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 gaining approval, people familiar with the matter said, asking not to be named because the permits aren’t public.

The clearances from key Indian ministries are a step toward full approval for expansion in India, and the companies will still likely to be required 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 trade restrictions and Covid-related production disruptions laid bare the risks of too much concentration in one country.

The clearances signal that India is allowing more Chinese companies in to build out its tech manufacturing sector, even as political tensions between the Asian neighbors have intensified.

Prime Minister Narendra Modi has made it a national priority to grow India’s manufacturing sector, providing financial incentives and government support for companies’ expansion projects.

Apple has played a central role in that effort, with partners such as Hon Hai Precision Industry Co. producing more iPhones in the country for the latest generation than ever before.

About 14 suppliers are receiving green light from India, after Apple named them as companies whose services it needs to increase 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 started making more of them in India through Taiwanese partners.

Representatives for Luxshare, Sunny Optical, Apple and India’s technology ministry didn’t respond to emails seeking comments.

Cupertino, California-based Apple wields tight control over its supply chain that comprises hundreds of component makers.

Some Indian companies, such as the Tata Group, already provide Apple with parts, and the country is pushing to add more local providers into the supply chain to boost and diversify its electronics industry.

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