Apple gets a boost in India as its Chinese suppliers are given the green light to expand

More than a dozen of Apple’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 and a unit of lensmaker Sunny Optical Technology Group are among the companies gaining approval, people familiar with the matter said, asking not to be named because the permits are not 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 neighbours 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 producing more iPhones in the country for the latest generation than ever before.

About 14 suppliers are receiving the 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 did not respond to emails seeking comments.