Border conflict with China impacts iPhone production in India
What's the story
Repercussions of India's geopolitical tensions with its neighbor China are being felt at Apple's iPhone production facilities in India. The South China Morning Post reports that the tensions have limited the issuance of entrance visas to Chinese engineers, which, in turn, is impacting Apple suppliers in the country. The Indian government had previously banned numerous Chinese apps and product imports after the border face-off.
Snail's pace
India slows down issuance of visas to Chinese engineers
Apple requires Chinese engineers to help its suppliers set up factories and begin production. However, the Indian government has reduced the issuance of visas to Chinese nationals following border tensions earlier this year. The country has also beefed up border control measures amid the COVID-19 pandemic. The SCMP report fails to address the pandemic as a possible reason for the slower issuance of visas.
More exports
Apple lobbying the Modi government to increase PLI scheme budget
The development follows reports suggesting that Apple is lobbying the Indian government to begin production of iPads in the country. Prime Minister Narendra Modi's government is set to announce a new Production-Linked Incentive (PLI) scheme to improve the country's exports of electronics such as tablets, servers and personal computers. Apple is hoping the lobbying would lead the government to increase the scheme's budget.
Shifting operations
Apple and its suppliers have been increasing investments in India
The Indian government's PLI scheme was initially announced with a $1 billion budget. It offers suppliers and manufacturers cashback for exports. Apple and its suppliers such as Foxconn have reportedly been increasing investments in India, and want the scheme's budget raised to $2.7 billion. Apple is de-prioritizing China as its main production hub and gradually shifting operations to India and Vietnam.
No clarity
Chinese media says companies being nudged to seek hard-to-obtain permits
The SCMP report cites uncorroborated sources saying India is nudging companies to opt for the more difficult to obtain employment permits. Currently, Apple has three major suppliers that operate in India: Wistron, Foxconn, and Pegatron. Out of the three, it is not clear which will produce the iPad and which supplier is affected by the visa issues.