Apple Faces Obstacles in Move to Boost India Manufacturing

According to sources familiar with Apple’s operations, the Financial Times reported on Tuesday that the company is encountering obstacles as it seeks to raise production in India.

Due to the impact of COVID-related restrictions on supply chains across industries and escalating trade and geopolitical tensions between Beijing and Washington, the company based in Cupertino, California has been relocating its production away from China.

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A source familiar with the matter told FT that at a casings factory located in southern India, which is operated by the conglomerate Tata Group, only 50% of the components produced are of sufficient quality to be sent to Apple’s supplier Foxconn.

According to FT’s report, this yield of 50% falls short of Apple’s target of zero defects. The report also stated that the company’s expansion in India has been sluggish, in part due to difficulties related to logistics, tariffs, and infrastructure.

There was no prompt response from Apple and Tata Group in regards to the request for comment.

Apple has made a significant investment in India since commencing iPhone assembly in the country in 2017, initially with Wistron Corp, and later with Foxconn. This move aligns with the Indian government’s efforts to promote domestic manufacturing.

In the previous month, India’s trade minister stated that Apple intends to increase its production contribution from the current 5-7% to 25% from India.

Jean Harris

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