Tim Cook on previous visit to India — photo courtesy: Apple
5 Facebook x.com Reddit
Indian media reported that Apple is in talks with more than 40 firms in the region to become suppliers of components for devices including the iPhone, ahead of the introduction The Trump administration has imposed tariffs on Chinese imports.
The tariffs that are nominally applied to the country are paid by the American firm importing the goods. Therefore, any Chinese tariff will increase the cost of importing the iPhone for Apple, and hence the price of the iPhone will skyrocket.
However, according to Indian publication MoneyControl, Apple is working to get around this issue by replacing China with more suppliers in India. Apple is reportedly in talks with over 40 suppliers, ranging from major tech firms and large conglomerates to IT companies and electronics manufacturing services (EMS) providers.
“This activity has been going on at a higher level for some time now. Apple has a large team that is talking to Indian companies, including large conglomerates,” an unnamed source told the publication. “They have met with all the major EMS companies in India, including Dixon and Amber. They are also talking to some global players.”
A second source said Apple is working to compile a list of potential suppliers. “Apple is evaluating which component could be sourced from which Indian company if it were to invite them as partners,” the source said.
“It will take some time though,” the source continued, adding that “for example, it took Aequs Group almost two years to get to the trial stage to become Apple’s supplier for MacBook cases and mechanical components for the Apple Watch.”
Aside from the expected escalation of tensions between the US and China, Apple is said to be working with Indian companies because of the expected local incentives. A third source said Apple is also planning joint ventures with firms in Taiwan, Japan, South Korea and elsewhere.
“However, it is difficult for Apple to switch to non-Chinese suppliers,” the source said. “[Before] 2020, everything Apple made was made in China, including most of its component supplies.”
“Apple is [now] taking proactive steps ahead of the upcoming electronics incentive scheme to allow Indian companies to attract tech partners from other countries and quickly benefit from the initiative,” he or she continued.
Tensions are also rising between India and China. This has led to India denying permission for Chinese firms to set up operations in the country, including iPad maker BYD.
“Apple’s Chinese partners are not interested in coming to India because of existing cases against other Chinese electronics companies. There are also visa issues,” the third source continued.
Expanding the supply chain in India is far from a sudden move. Apple and other tech companies have been working for years to reduce their over-reliance on China.
As a result, Apple’s suppliers have spent $16 billion on their exit from China by January 2024. While countries like Vietnam have benefited, expansion in India has made Apple the fastest-growing firm in the country in the last 50 years.
Follow AppleInsider on Google News
