Several Chinese Suppliers To Apple To Soon Seek Government Approval To Form JVs In India

Several Chinese suppliers to iPhone maker Apple will "very soon" seek approval from the government to form joint ventures with domestic firms to set up facilities here, as the California-based company is looking to develop local capacities, sources said. 

These suppliers need approval as the government's foreign direct investment (FDI) guidelines require companies from neighbouring countries to seek mandatory government nod for investments. 

The government has given certain preliminary clearances to several Chinese suppliers, the sources said.

According to the sources, Apple had some concerns with regard to its suppliers based in China and they had informally discussed the issue with the government.

The company has also informally shared a list of suppliers, many of which are likely to be approved as the government has no issues with them, one of the sources said, adding the government is keen to develop local capacities to promote manufacturing as part of the Make in India initiative.

"Apple will facilitate them, and very soon they will come up with their applications. Those suppliers would have a local partner," they added.

An email query to Apple on the issue remained unanswered.

Commerce and Industry Minister Piyush Goyal on Monday said that the iPhone maker is looking to scale up its manufacturing in India as the business environment is helping global firms make the country their base.

He had said that Apple already has about 5-7 per cent of their manufacturing in India. "If I am not mistaken, they are targeting to go up to 25 per cent of their manufacturing. They launched their most recent models from India, manufactured in India."

In November 2022, telecom and IT minister Ashwini Vaishnaw said that the biggest unit to manufacture Apple iPhone in India is coming up at Hosur near Bengaluru, which will employ around 60,000 people.

The company gets iPhones manufactured by electronics giants—Foxconn, Wistron and Pegatron in India, while a majority of the high-end components are still sourced from China.

Electronics and IT Secretary Alkesh Kumar too has stated that Apple is not only manufacturing mobile phones for India, but it exported handsets worth USD 1 billion as of December.

In April 2020, the government made its prior approval mandatory for foreign investments from countries that share a land border with India to curb opportunistic takeovers of domestic firms following the COVID pandemic.

Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan. As per that decision, FDI proposals from these countries need government approval for investments in India in any sector.