Apple’s Chinese vendors may soon be allowed to set up manufacturing plants in India by the government. The move will be finalised if Apple assures the government that it has no other option for sourcing components, a report by Economic Times (ET) said.
Sources told ET that the government is open to investments by Chinese entities that promote technology and production capabilities if there are no alternatives available.
ET also added that the manufacturers would be required to import components if there are some concerns around the vendor and no other alternatives are available. The government may also ask the manufacturers to transfer the technology to local manufacturing.
Lately, the government has been asking Apple to set up its manufacturing plants in India. Since the launch of the iPhone 14, the company has been scaling up its production capacity in India, shifting from China.
The December quarter might mark Apple’s highest-ever shipment of iPhones to India at around 570,000 units compared with 370,000 units in 2021, according to experts.
In April 2020, the Department for Promotion of Industry and Internal Trade (DPIIT), amended the Foreign Direct Investment (FDI) rules to add that companies from countries sharing a land border with India will need a prior nod from the government.
With these changes, any foreign direct investment from Bangladesh, China, Pakistan, Nepal, Myanmar, Bhutan, and Afghanistan now requires prior government approval, irrespective of the FDI cap applicable to the sector.