Apple scouts new deals to push India value-add, in talks with key players

In talks for fresh collaborations with Flextronics, Jabil, Aequs, Tata firms

Apple Inc is ramping up efforts to increase the Indian value addition in its products, including the iPhone and soon-to-be-assembled AirPods, as part of a broader strategy to diversify its supply chain away from China. The American tech giant, according to people in the know, is actively seeking deeper partnerships with non-Chinese global and Indian vendors, while also scouting for new partners.
 

As part of this push, the Cupertino-headquartered company is in talks with key players. US-based Flextronics is being considered for the production of power equipment in India, while Jabil — American manufacturing solutions provider — may take on the manufacturing of plastic enclosures for AirPods, the sources said.
 

Additionally, Karnataka-based Aequs, an electronics manufacturing services (EMS) provider, is in discussions with Apple about supplying non-iPhone enclosures. The company is also exploring partnerships with firms in Haryana, Uttar Pradesh, and Karnataka to manufacture various components — an effort to localise production and boost value addition within India.

Apple’s international vendors are also engaging with Tata group firms, aside from Tata Electronics, with which the technology giant already has a tie-up to explore the possibility of manufacturing capital equipment – a factor crucial for increasing the level of domestic value addition in Apple’s Indian operations. Furthermore, the tech giant is scouting for Indian partners for joint ventures in the production of displays and camera modules. 
 

Neither Flextronics, Jabil Aequs, nor Apple responded to requests for comment. The Tata group did not comment on the matter.

In 2022, Apple solidified a partnership with Japanese mobile lithium-ion phone cell battery maker TDK, becoming its first anchor client in India.

Motherson in talks to join Apple network
 

TDK has since established a production facility in Gurugram, with investment figures undisclosed. 
 

More recently, the Motherson group is in talks to join the Apple supply chain network in India, in a joint venture with Hong Kong-based BIEL Crystal Manufactory to make components .
 

Apple’s existing supply chain in India is already showing results: Its three iPhone assembly vendors — Tata Electronics, Pegatron, and Foxconn — have managed to achieve local value addition in the range of 12-14 per cent over the past three years. With new partnerships on the horizon, this figure is expected to rise.
 

The Indian government’s electronics production-linked incentive (PLI) scheme has set a target of 40 per cent value addition by 2027.
 

Following the Galwan Valley border clashes and rising tensions between India and China and the changes under the Press Note-3 regarding foreign direct investment (FDI) policies, many Chinese companies — including Apple’s vendors — were not given clearance to establish India operations.
 

In response, Apple shifted its focus to building relationships with non-Chinese suppliers and nurturing Indian partners. A key milestone in this strategy was Tata Electronics’ entry into iPhone production, starting with enclosures manufactured at its Hosur facility. The relationship deepened when the Tata group acquired Wistron, an iPhone assembler, marking its first foray into iPhone assembly. Talks are now underway for Tata to purchase Pegatron’s iPhone assembly plant in Tamil Nadu.
 

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

In 2023-24, iPhone production in India in value terms hit $14 billion, of which $10 billion was exported. Apple’s original target – through its vendors -- was to shift 10 per cent of iPhone production from China to India under the PLI scheme, but that benchmark has already been surpassed. The company now expects to relocate 20-25 per cent of its iPhone production to India by the end of the scheme in 2026-27.

India’s big bite
 

12-14%: Current level of local value addition in Made-in-India iPhones
 

40% by 2027: Original expectation for local value addition under mobile device PLI scheme
 

Flextronics being considered for making power equipment in India
 

Jabil may produce plastic enclosures for AirPods
 

Aequs may be tasked with supplying non-iPhone enclosures
 

Tata firms, other than Tata Electronics, could be brought in to produce capital equipment