China's Battle to Halt Apple's Supply Chain Shift to India Intensifies

China's Efforts to Halt Apple's Supply Chain Diversification to India

Context:

Apple is diversifying its supply chain from a China-centric model to include other countries, with significant progress being made in India. This shift is concerning for China due to potential economic and political implications.

Challenges in India:

• Political Tensions: The relationship between China and India is delicate, leading to secretive discussions about Apple's expansion using codenames like 'the fruit company.'
• China’s Interference: Beijing has imposed restrictions on the export of critical materials and high-tech equipment needed by Apple and its suppliers. Additionally, the movement of Chinese technicians into India has been stalled.
• Regulatory Hurdles: Apple faces stringent regulatory requirements in China, including a crackdown on device usage by government employees and AI development restrictions.

Support from India:

• Government Incentives: The Indian government has provided significant incentives, such as the Production-Linked Incentive program, to attract Apple and its suppliers. This includes放松对苹果在印度开设直营店的限制。
• Supplier Engagement: Regular visits to Taiwan have been made to recruit firms like Wistron and Foxconn, with major Indian conglomerate Tata also becoming a part of Apple’s production network.

Progress and Predictions:

• Manufacturing Capabilities: India is on track to contribute more than 20% of global iPhone output in 2025.
• Barriers Remaining: Societal pressures in India, such as visa restrictions for Chinese citizens, limit the scale of operations. However, Indian officials acknowledge the need to further develop the country's manufacturing capabilities.

Apple’s Strategy:

• Risk Mitigation: Diversifying supply chains to countries like India and Vietnam helps mitigate risks from issues such as the COVID-19 pandemic and geo-political tensions.
• Economic Benefits: By producing in multiple countries, Apple can avoid high tariffs imposed on Chinese imports, particularly relevant under potential US-China trade policies.

Conclusion:

While China is actively trying to slow down Apple’s expansion into India, the latter's strategic diversification efforts are likely to continue, driven by both economic and operational benefits.