Govt weighs allowing Apple’s Chinese suppliers via JV route

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NEW DELHI: Top Chinese suppliers to Apple’s manufacturing ecosystem could make their way into India with the government examining a plan to allow entry for them through the joint venture route with Indian partners.
Manufacturers of Apple’s devices such as Foxconn, Wistron and Pegatron — all of whom are now present in India — have raised the need to have the component ecosystem handy in India, instead of depending on imports which gets cumbersome in larger manufacturing setups, sources told TOI.
The move is being contemplated in view of the government’s focus to push the manufacturing of iPhones in India as it eyes a quarter of iPhone manufacturing — estimated at around $50 billion — to come from the country over the coming years, especially as abooster to the Make-in-India plan and the production-linked incentive (PLI) scheme.
A decision on the issue will require a political call, given the tension at the border, both in Ladakh and Arunachal Pradesh, and the government’s reluctance so far to allow companies with links to China to have a business-asusual approach when it comes to investments. In fact, soon after the Covid outbreak, first spotted in Wuhan, the government had put all Chinese investments on the approval route in addition toblocking several apps.

But a relook, at least at the official level, follows from the need to position India as an alternative manufacturing destination, not just for the domestic market but also for exports.
“We are looking if the joint venture route could be the best way to get the key suppliers to Apple’s manufacturing ecosystem to India,” a senior source in the government said, with officials across at least three government departments suggesting that there appeared to be merit in the argument to allow vendors of Apple to come through JVs.
This route has been contemplated since the government has not been comfortable with the idea of the Chinese suppliers having fully owned setups here, with not much benefit for any Indian supplier in terms of technology transfer, business opportunities, or control. “A JV ensures that Indians have a stake in the success of Apple’s manufacturing in India, while the country also gets a top supplier ecosystem in-house rather than depending on Chinese imports,” one of the sources said.
The government believes that Apple’s manufacturing setup in the country needs to get deeper in order to have global scale and large-volume factories. Representatives of Apple in India as well as those from Foxconn, Wistron and Pegatron have also highlighted the need to have “leniency and openness” in allowing their component suppliers to set up shop.

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