June 25, 2024

Every time Apple has looked for an alternative to China for production, it has turned to India–this time, it’s for battery production.

Apple is encouraging suppliers to move toward India-made iPhone batteries for the upcoming iPhone 16 line as part of its broader effort to diversify supply chain, the Financial Times reported on Dec. 6, citing anonymous sources. The tech giant has reportedly given the mandate to Shenzhen-based Desay and Taiwanese battery supplier Simplo Technology.

Amid rising tensions between Washington and Beijing, Apple has not only been increasing manufacturing in India—it produced iPhone 15 phones there—but is also stepping up its physical presence with retail stores in India. Local business houses are taking note. Massive Indian conglomerate Tata Group has already taken over operations of Apple supplier Wistron plants and is reportedly looking to take charge of Pegatron’s, too.

However, India is still no match for Chinese manufacturing in terms of speed, scale, and even quality of production. Its physical infrastructure, like highways and railroads for time- and cost-efficient deliveries, is also lacking. Adding to that are regulatory hurdles instated after a border standoff with China. In 2020, India implemented stricter regulations requiring foreign investment from the contentious neighbor to be approved by the central government—which applies to most of Apple’s suppliers since they are based in China.

Company of interest: TDK

Earlier this week, TDK, a Japanese supplier for Apple, announced it is setting up a 180-acre facility in Manesar, in the state of Haryana, “to build cells for batteries which will be used in the #MadeInIndia iPhones,” Rajeev Chandrasekhar, India’s minister of state for electronics and IT, posted on X on Dec. 4. TDK expects to start production in 2025.

The cells produced by TDK and its peers are packaged by companies like Desay and Simplo and then sent them to assemblers such as Foxconn.

Apple’s operations shift from China to India, by the digits

$1.5 billion: How much Foxconn, Apple’s biggest supplier, plans to invest more in a new production facility in India

14 out of 17: Chinese suppliers submitted by Apple the Indian government gave initial clearance to for operating in India this January. The companies are expected to find a local joint venture (JV) partner domestically and then seek full approval for setting up.

$5 billion: Value of iPhones Apple has exported from India between April and October, representing 177% year-on-year growth

8%: Apple’s expected India smartphone market share in 2024, up from 6%

$330 million: Size of investment Apple component-maker Luxshare moved away from India in November, after years of failing to secure Indian government approval for an expansion plan. The primary supplier of Airpods will use the funding to grow its Vietnam presence instead.

$19.5 billion: Size of the JV between Foxconn and Vedanta, initially announced in February 2022, which was called off this April, after the two reportedly couldn’t find a technology partner.

12 hours: Daily work-shifts, up from nine hours, Apple and Foxconn won in Karnataka, home to IT capital Bengaluru, as part of legislation reform. Overtime hours were also bumped up from 75 to 145 hours over a three-month period.

Quotable: The politics of making the Indian shop floor as efficient as the Chinese one

“The One Party system effectively gives them subsidies, infrastructure, buses in labor when there are labor shortages. But India, it’s a noisy democracy. You have to contend with lawmakers, landowners, labor groups, bunch of these people to be able to get the same level of efficiency.”

Nilesh Christopher, editor of Rest of World magazine

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