Apple faces obstacles in move to boost India manufacturing - FT

A salesperson walks past an advertisement at an Apple reseller store in Mumbai
A salesperson walks past an advertisement at an Apple reseller store in Mumbai, India September 1, 2021. Picture taken September 1, 2021. REUTERS/Francis Mascarenhas

Feb 14 (Reuters) - Apple Inc (AAPL.O) is facing challenges as it tries to increase production in India, the Financial Times reported on Tuesday, citing people familiar with the iPhone maker's operations.

The Cupertino, California-based company has been shifting production away from China after the country's strict COVID-related restrictions dented supply chains across industries and as trade and geopolitical tensions between Beijing and Washington escalated.

At a casings factory in southern India run by conglomerate Tata Group, only about half of the components from the production line are in good enough shape to be sent to Apple's supplier Foxconn (2317.TW), FT reported, citing a person familiar with the matter.

This 50% 'yield' does not meet Apple's goal for zero defects, FT reported, adding that the company's process of expanding in India has been slow in part due to challenges in logistics, tariffs and infrastructure.

Apple and Tata Group did not immediately respond to a request for comment.

Apple has bet big on India since it began iPhone assembly in the country in 2017 through Wistron Corp (3231.TW) and later Foxconn, in line with the Indian government's push for local manufacturing.

Last month, India's trade minister said that Apple wants India to account for up to 25% of its production from about 5 - 7% currently.

Reporting by Sneha Bhowmik in Bengaluru; Editing by Nivedita Bhattacharjee

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