Chinese Apple Suppliers: The government could allow Apple’s select Chinese suppliers to set up factories in India

The government could allow Apple’s Chinese suppliers to set up manufacturing facilities in India on a case-by-case basis after ensuring the Cupertino-based iPhone maker has no other options for sourcing components, officials with knowledge of the matter said.

They said the government is open to investment by Chinese entities offering technology and manufacturing capabilities for which no alternatives are available.

“If there is no alternative to the technology that a supplier has to offer, the government has no problem allowing it unless there is doubt about the extent,” one of the officials said.

If there are doubts about the supplier and there are no alternatives available, the Indian manufacturer will have to import the components. The government would also suggest a technology transfer for local manufacturing, a model it had followed in the case of investments from China, the official said. “We asked them (Apple) to provide a list of suppliers,” the official said, adding that these would be vetted before the government gives the hint of him.

Apple did not respond to questions.

The government has urged the world’s most valuable company to bring its entire manufacturing ecosystem to India which includes iPhones, iPads and computers.

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The company that recently launched the iPhone 14, the latest iteration of its best-selling product, has progressively increased Indian manufacturing to reduce dependence on China.

Industry analysts and executives estimate that the December quarter will mark Apple’s highest-ever iPhone shipment to India at around 570,000 units compared to last year’s 370,000 units, according to ET earlier this month.

However, Apple continues to import many components. In April 2020, India had changed its foreign direct investment (FDI) policy and made a prior government nod to foreign investment from countries that shared a border with it mandatory, a measure that was seen largely aimed at Chinese investments.

The Department for the Promotion of Industry and Domestic Trade (DPIIT), while making the change, said in its press note that this was aimed at “curbing opportunistic takeovers / acquisitions of Indian companies due to the current Covid pandemic. -19 “.

These changes in FDI policy meant that any foreign direct investment from Bangladesh, China, Pakistan, Nepal, Myanmar, Bhutan and Afghanistan required prior government approval, regardless of the FDI ceiling applicable to the sector. Prior approval was made mandatory for sectors that were otherwise on the auto route. This also applied to indirect FDI from these countries routed through others.

An inter-ministerial committee set up to review proposals involving FDI from China has so far authorized investments in Citizen Watches Co, Nippon Paint Holdings and Netplay Sports.

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