Apple seeks more Indian partners, Flextronics, Jabil, Aequs plan to boost local production: Report

Key players in the Indian supply chain are being targeted for various production roles.

Apple Inc is significantly looking to step up its efforts to enhance value addition in its Indian operations, including the assembly of iPhones and, soon, AirPods. This move is part of a broader strategy to reduce reliance on China and diversify its global supply chain, according to a report by Business Standard.

The American tech giant is actively pursuing deeper partnerships with non-Chinese and Indian vendors while seeking collaborators, the BS report added. Key players in the Indian supply chain are being targeted for various production roles. The US-based Flextronics is under consideration for producing power equipment in India, while Jabil, an American manufacturing solutions provider, is being eyed for producing plastic enclosures for AirPods.

In addition, Karnataka-based Aequs, an electronics manufacturing services (EMS) provider, is in talks with Apple to supply enclosures for non-iPhone products. Aequs is also exploring collaborations with firms in Haryana, Uttar Pradesh, and Karnataka to manufacture various components, aiming at bolstering local production and value addition.

Also Read | Tata's fourth iPhone assembly plant likely to start in November: Report

Apple’s international vendors are also engaging with Indian partners, including the Tata Group. Besides Tata Electronics, which is already a partner, Apple is exploring opportunities with Tata firms to produce capital equipment and other components critical for boosting domestic value addition. The company is also seeking Indian partners for joint ventures in the production of displays and camera modules.

Flextronics, Jabil, Aequs and Apple did not respond to Business Standard's requests for comment, and the Tata Group declined to comment on the matter, it added. Moneycontrol could not independently verify the report.

In 2022, Apple solidified its relationship with Japanese mobile battery maker TDK, becoming its first anchor client in India. TDK has since established a production facility in Gurugram, with investment details remaining undisclosed.

Also Read | Apple's push for Made-in-India iPhone Pro models may create 600,000 jobs: Report

More recently, the Motherson Group is negotiating to join Apple’s supply chain network in India through a joint venture with Hong Kong-based BIEL Crystal Manufactory to produce components.

Apple’s existing supply chain in India has yielded results, with its three iPhone assembly vendors—Tata Electronics, Pegatron, and Foxconn—achieving local value addition of 12-14 percent over the past three years. With upcoming partnerships, this figure is expected to rise.

The Indian government’s electronics production-linked incentive (PLI) scheme aims to achieve 40 percent value addition by 2027.

Amid rising tension between India and China, particularly following the Galwan Valley border clashes and new foreign direct investment (FDI) policies under Press Note-3, many Chinese companies, including Apple’s vendors, faced hurdles in setting up operations in India. In response, Apple has shifted its focus to developing relationships with non-Chinese suppliers and strengthening ties with Indian partners. This strategy saw a major milestone when Tata Electronics began iPhone production with enclosures from its Hosur facility. The partnership deepened with Tata's acquisition of Wistron, an iPhone assembler, and negotiations are underway for Tata to acquire Pegatron’s iPhone assembly plant in Tamil Nadu.

Tata Electronics is also investing Rs 6,000 crore in a factory in Hosur, set to begin iPhone production by November this year.